By Georgina McCartney
(Reuters) -Oil fell on Friday and was on track for a weekly decline, pressured by concerns of more supply entering the market from OPEC+, while Libyan output disruptions put a floor on prices.
Brent crude futures for October delivery, which expire on Friday, were down $1.10, or 1.38%, at $78.84 a barrel by 11:34 a.m. EDT. U.S. West Texas Intermediate crude futures slipped $1.95, or 2.57%, to $73.96.
Both benchmarks had a day earlier settled more than $1 higher.
OPEC+ is set to proceed with a planned oil output hike from October, as the Libyan outages and pledged cuts by some members to compensate for overproduction counter the impact of sluggish demand, six sources from the producer group told Reuters.
“OPEC+ talking about going ahead with tapering off production cuts was the headline that really sunk us today,” said Phil Flynn, analyst with Price Futures Group.
More than half of Libya’s oil production, or about 700,000 barrels per day, was offline on Thursday and exports were halted at several ports following a standoff between rival political factions.
Production losses could reach between 900,000 and 1 million bpd and last for several weeks, according to consulting firm Rapidan Energy Group.
Iraqi supplies are also expected to shrink after the country’s output surpassed its OPEC+ quota, a source with direct knowledge of the matter told Reuters on Thursday.
Iraq plans to reduce its oil output to between 3.85 million and 3.9 million bpd next month.
Meanwhile, investors responded to new data on Friday that showed U.S. consumer spending increased solidly in July, suggesting the economy remained on firmer ground early in the third quarter and arguing against a half-percentage-point interest rate cut from the Federal Reserve next month.
Lower rates can boost economic growth and demand for oil.
“That modest inflation increase could basically solidify that we will only get a quarter percentage-point cut and those hoping for a half will have to wait,” said Price Futures Group’s Flynn.
This post is originally published on INVESTING.
