Crude Oil Prices Settle Higher, But Can't Avoid Weekly Slump Amid Rising Supply

© Reuters. © Reuters. – WTI crude oil prices settled higher Friday, but posted steep losses for the week, as traders eased bets on a global supply shortage in the wake of resuming crude flows from Libya and expectations the decline in Iranian exports would be less severe than anticipated.

On the New York Mercantile Exchange for August delivery rose 1.00% to settle at $71.01 a barrel, while on London’s Intercontinental Exchange, rose 1.5% to trade at $75.56 a barrel.

Crude oil prices fell nearly 4% for the week as mixed signals on supplies scaled back investor expectations for a global supply shortage. Libya resumed exports, U.S. supplies fell more than expected, while bets on a significant loss of Iranian crude were trimmed.

Data showing inventories of U.S. crude fell by 12.633 million barrels for the week ended July 6 were overshadowed by Libya’s announcement that it would reopen four oil export terminals, which some analysts said could see as much as 0.7 million barrels per day return to the market.

That came as investors were mulling the prospect of a less severe loss of Iran crude after U.S. Secretary of State Mike Pompeo said the White House would consider extending sanctions relief to some oil buyers of Iranian crude beyond the previously announced November deadline.

Rising OPEC output also weighed on sentiment as the oil-cartel revealed earlier this week its members had increased output last month, led by a rise in Saudi output to levels not seen since the output-cut agreement in 2016.

The International Energy Agency’s warning of a potential capacity crunch had a limited impact on markets.

“In June, Iran’s crude exports fell back by about 230,000 barrels a day, albeit from a relatively high level in May, as European purchases dropped by nearly 50%,” the agency said.

Sentiment on oil prices on Friday were also helped by data pointing to signs of a pause in the pace of U.S. output, which remains unchanged at 10.9 million barrels a day.

Oilfield services firm Baker Hughes reported its weekly U.S. rig count was unchanged at 863.

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