Oil prices rose on Friday but fell during the week as investors weighed expectations of increased global supply with new stimulus from top crude importer China. Investors are considering OPEC+’s decision to increase production.
Brent crude futures rose 38 cents, or 0.53%, to $71.89 a barrel. Front-month WTI crude futures rose 51 cents, or 0.75%, to $68.18.
Brent fell nearly 3% on the week, while WTI fell nearly 5%.
China’s central bank, aiming to bring economic growth back to its target of around 5%, cut interest rates on Friday and injected liquidity into the banking system.
More fiscal measures are expected to be announced before the Chinese holidays, which begin on October 1, after the Communist Party’s top leaders showed an increasingly urgent response to rising economic headwinds.
Despite China’s aggressive stimulus, concerns about oversupply from OPEC’s plan to restore production have pushed prices lower.
The Organization of the Petroleum Exporting Countries and its allies will press ahead with plans to increase output by 180,000 bpd each month from December, OPEC+ sources said.
The planned increase is due to Saudi Arabia’s decision to abandon its $100 oil price target and gain market share.
However, Saudi Arabia denied targeting a specific oil price. The sources said the plans to increase output from December were not a significant change from current policy.
More supply is expected to enter the global market after rival factions jockeying for control of Libya’s central bank signed a deal on Thursday to end their dispute.
The dispute has seen crude exports fall from more than 1 million barrels per day (bpd) this month to 400,000 barrels per day (bpd).
In the U.S., some operators have restarted operations in the Gulf of Mexico after Hurricane Helen hit Florida on Thursday night. Chevron redeployed staff on Friday and restarted production at platforms operated by the company.
Meanwhile, the devastation from the hurricane, which is the seventh-strongest to hit Florida, could affect fuel demand in the state, which is the third-largest consumer of gasoline in the US. The aftermath of the hurricane has been a drag on demand.
Meanwhile, U.S. consumer spending rose slightly in August, a sign that the world’s largest economy is maintaining its momentum in the third quarter as inflation pressures stabilize.
The U.S. Federal Reserve cut interest rates by half a percentage point last week, kicking off what is expected to be a steady easing of monetary policy. U.S. inflation data opens the door to further rate cuts by the Fed.
Rising tensions in the Middle East pose a threat to global crude supplies. Israel’s attacks on Beirut’s southern suburbs on Friday showed it does not mind efforts of ceasefire.
