Oil prices increased on Friday, paring losses but heading for a weekly decline as investors weighed expectations of higher output from Libya and the broader OPEC+ group against fresh stimulus from China.
Brent crude futures rose 15 cents, or 0.21%, to $71.75 a barrel by 0630 GMT, while WTI crude futures rose 18 cents, or 0.27%, to $67.85.
For the week, Brent crude fell about 3.7%, while WTI is expected to drop about 5.7%.
Oil markets appear to be focused on Libya and OPEC this week, despite Chinese authorities finally issuing bolder stimulus.
The oil market has been struggling with weakening demand for the past few months, with OPEC+’s decision to increase output adding to the gloom. Whether the Chinese stimulus will translate into higher fuel demand is uncertain, but it could provide breathing room for the oil market.
China’s central bank cut interest rates on Friday and injected liquidity into the banking system in a last-ditch stimulus measure Beijing is seeking to bring economic growth back to its target of around 5% this year.
More fiscal measures are expected to be announced before China’s Oct. 1 holiday, after top Communist Party leaders showed a growing sense of urgency about economic headwinds.
Meanwhile, rival groups vying for control of Libya’s central bank signed a deal on Thursday to end the problems. The dispute has caused a sharp decline in the country’s oil production and exports, with crude exports falling to 400,000 barrels per day (bpd) this month from 1 million barrels last month.
The deal could see more than 500,000 bpd of Libyan supply return to markets.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, are currently cutting oil production by a combined 5.86 million bpd, but plan to reverse 180,000 bpd of those cuts in December.
A media report on Wednesday claimed that the previously announced reversal was due to Saudi Arabia’s decision to abandon its $100 oil price target and gain market share, which caused oil prices to fall 3% in the previous session.
Saudi Arabia, the de facto leader of OPEC+, has repeatedly denied targeting a specific oil price, and sources in the group said plans to increase production in December were not a significant change from current policy.
Overall, oil markets remain very cautious about global oil balances in 2025 and what OPEC+ should do.
