Oil prices fell more than 1% on Friday after the oil workers’ strike in Norway ended. The end of the Norwegian strike will boost oil production while Hurricane Delta forces the US energy companies to cut production.
Brent futures LCOc1 fell 49 cents, or 1.1%, to settle at $42.85 a barrel, while West Texas Intermediate (WTI) crude CLc1 fell 59 cents, or 1.4%, to settle at $40.60.
Despite the price drop on Friday, both indicators are up about 9% this week. It recorded the first weekly increase in three weeks and the biggest weekly increase for Brent since June.
Oil futures surged earlier in the week due to concerns that the strike in Norway and the hurricane heading to the US Gulf Coast would reduce crude oil production.
Norwegian oil firms reached a compromise with trade union officials on Friday and ended the 10-day strike that threatened to cut the country’s oil and gas production by about 25% next week. This eliminated one of the rising factors that supported prices.
In addition, doubts that a coronavirus economic stimulus agreement could be reached before the November 3 elections in the US Senate was one of the factors affecting prices.
Meanwhile, Hurricane Delta hit the largest US offshore Gulf of Mexico energy production in 15 years, halting most of the oil and almost two-thirds of natural gas production in the region.
Apparently, the worsening global oil demand outlook due to the potential increase in coronavirus cases this winter will force the Organization of Petroleum Exporting Countries (OPEC) to consider deeper cuts below the current quota scheduled in 2021.