Oil Prices Jump as US Revises GDP, Iran Output Cut
Oil prices increased early on Friday on Iran’s planned production cut report at the time Libyan authority declare force majeure curtailing export. The development has triggered supply concerns in the global commodities market, raising energy costs risk as countries battle inflation.
Demand outlook appears positive as U.S. second-quarter gross domestic product (GDP) was revised up to 3% from 2.8% previously. The GDP revision “sparked the bull run across multiple asset groups today,” Mizuho’s Robert Yawger says in a note.
Brent crude trades at $79.16 per barrel on Friday. US benchmark West Texas Intermediate (WTI) rose by 0.37% to $76.19 per barrel, after closing at $75.91 in the prior session.
Concern over potential supply shortages due to the suspension of oil production in Libya supported upward price movements.
Libya’s National Oil Corp. said Thursday that the losses incurred due to a decision by the eastern government to shut down oil and gas operations in the country have exceeded $120 million over the course of three days.
In a statement, the corporation, which controls the country’s oil resources, noted a decline in oil production rates from nearly 1,3 million barrels per day on Monday (the day the shutdown began) to 591,024 barrels on Wednesday.
Libya, one of the major members of the Organization of the Petroleum Exporting Countries (OPEC) group, produced 1.18 million barrels of crude oil per day in July.
Oil prices jumped over 1% on Thursday after it was reported that Iraq planned to reduce its oil production in September as part of a plan with the Organization of Petroleum Exporting Countries.
Iraq will cut output to between 3.85 million and 3.9 million barrels per day, after producing about 4.25 million bpd in July.
Elsewhere, the European gas market is grappling with a series of supply concerns despite ample inventories cushioning risks ahead of the winter, according to analysts.
The Dutch TTF contract, which currently trades 1.1% higher at 39.33 euros a megawatt-hour, is up roughly 7% on the week and 12% on the month.
Annual maintenance in top supplier Norway, with gas exports this week hitting their lowest level since June, and fears that Russian gas flows via Ukraine will be disrupted before the expiration of a transit deal between the two countries, are among the main factors supporting prices in the near term. #Oil Prices Jump as US Revises GDP, Iran Output Cut
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