Oil prices rose on Friday as it is hard to figure out for investors supply concerns in Libya and Iraq, but signs of weak demand, particularly in China, capped gains.
Brent crude futures for October delivery were up 39 cents, or 0.5%, at $80.33 a barrel by 0630 GMT on Friday. The more actively traded November contract was up 34 cents, or 0.4%, at $79.16.
WTI Crude futures rose 30 cents, or 0.4%, to $76.21.
Both indexes rose more than $1 on Thursday on oil supply concerns, having gained 1.6% and 1.8% respectively this week.
Continuing concerns about dwindling supplies in Libya were compounded by Iraq’s plans to cut output, which could reduce global oil supplies.
But the gloomy economic outlook for mainland China, the world’s largest importer of crude, remains a persistent headwind to oil demand.
More than half of Libya’s oil output, or about 700,000 barrels per day (bpd), remained offline on Thursday, with exports halted at several ports following a stalemate between rival political factions.
Libya’s production losses could reach between 900,000 and 1 million bpd and could last several weeks.
Meanwhile, Iraqi supplies are also expected to shrink after the country’s output exceeded its OPEC+ quota. Iraq plans to cut oil output to between 3.85 million and 3.9 million bpd next month.
Brent and WTI, however, are on track for their second consecutive monthly declines, down 0.5% and 2.2% in August.
Demand concerns continue to weigh on the market. U.S. inventory data showed crude inventories for the week ending Aug. 23 were about a third lower than expected.
China’s August imports are expected to rise on a monthly basis, while the official figure for the world’s largest crude imports in July was 9.97 million bpd, the lowest daily since September 2022.
The market is concerned about the medium-term outlook, with oil balances in 2025 looking weak.
The allies, known as OPEC+, are set to phase out voluntary output cuts of 2.2 million bpd over a year from October 2024 to September 2025.
However, OPEC, in pursuit of higher prices, has no choice but to delay phasing out voluntary output cuts.
