By Georgina McCartney
HOUSTON (Reuters) -Oil prices were steady on Friday, but remained on track for a weekly fall as investors weighed expectations for higher global supply against fresh stimulus from top crude importer China.
Brent crude futures for November delivery were up 9 cents, or 0.13%, at $71.69 per barrel as of 11:00 a.m. EDT. The more actively traded December contract was trading 18 cents higher at $71.27 per barrel.
Meanwhile, front-month U.S. West Texas Intermediate crude futures were up 28 cents, or 0.41%, at $67.95.
On a weekly basis, prompt Brent was down around 4%, while WTI was on track to lose around 6%.
“The recent decision by OPEC+ to ramp up production has only added to the gloom,” said Priyanka Sachdeva, senior market analyst at Phillip Nova, adding that the oil market has been struggling with weakening demand over the past few months.
China’s central bank on Friday lowered interest rates and injected liquidity into the banking system, aiming to pull economic growth back towards this year’s target of roughly 5%.
More fiscal measures are expected to be announced before Chinese holidays starting on Oct. 1 after a meeting of the Communist Party’s top leaders showed an increased sense of urgency about mounting economic headwinds.
“Despite aggressive Chinese stimulus, concerns of oversupply from OPECโs plan to bring production back have pushed prices lower,” analysts at Aegis Hedging said in a note on Friday.
The Organization of Petroleum Exporting Countries (OPEC) and its allies, together known as OPEC+, will go ahead with plans to increase production by 180,000 bpd each month starting from December, two OPEC+ sources said.
A Financial Times report on Wednesday said the planned increase is due to Saudi Arabia’s decision to abandon a $100 oil price target and gain market share.
Saudi Arabia has repeatedly denied targeting a certain oil price, and sources at the wider group told Reuters that the plans to raise output from December do not represent any major change from existing policy.
And more barrels can be expected to enter the global market, after rival factions staking claims for control of the Central Bank of Libya signed an agreement to end their dispute on Thursday. The row had seen crude exports fall to 400,000 barrels per day (bpd) this month from more than 1 million last.
In the U.S., some operators have begun to resume operations in the Gulf of Mexico after Hurricane Helene made landfall in Florida on Thursday night, with Chevron (NYSE:CVX) on Friday redeploying personnel and restoring production at company-operated platforms.
Meanwhile, the destruction of the hurricane, counted as the seventh most powerful to slam into Florida, could weigh on fuel demand in the state, which is the third-largest gasoline consumer in the U.S.
“The aftermath of the hurricane is bearish really for demand, a large amount of the state got battered enough that demand should take a hit,” said John Kilduff, partner at Again Capital in New York.
Meanwhile, U.S. consumer spending edged higher in August in a sign that the world’s largest economy carried on momentum in the third quarter, as inflation pressures steady.
“The inflation data this morning was okay, the fed should stay on course, and that is supportive,” Again Capital’s Kilduff said.
The U.S. Federal Reserve cut interest rates by half of a percentage point last week, kicking off what was expected to be a steady easing of monetary policy.
This post is originally published on INVESTING.
