Oil in New York headed for the longest weekly winning streak since November 2017 as crises from Venezuela to Libya threatened supplies, while optimism over U.S.-China trade talks buoyed the outlook for demand.
West Texas Intermediate futures were little changed, poised for a fifth weekly increase. OPEC cut production for a fourth month in March, while supply risks are mounting in member nations exempt from the strategy. Power failures that plagued Venezuela last month were said to have briefly slashed crude output by half. And in Libya, tensions are rising as military leader Khalifa Haftar ordered his forces to advance on the capital.
Crude has surged more than 35% this year as the Organization of Petroleum Exporting Countries and its allies limit their output to counter record volumes from U.S. shale producers. Escalating tensions in Libya, the economic unraveling of Venezuela and the possibility that the White House won’t extend waivers for buyers of Iranian oil threaten to tighten supply further.
“The main risk for the weekend is the military risk in Libya,” said Olivier Jakob, managing director at consultants Petromatrix GmbH in Zug, Switzerland. “The move could be just a show of force but we expect the market to take increasing notice of this weekend risk.”
WTI for May delivery slipped 13 cents to $61.97 a barrel on the New York Mercantile Exchange. Prices dropped 0.8% over the previous two sessions, and are up 3% this week.
Brent for June settlement fell 28 cents to $69.12 a barrel on the London-based ICE Futures Europe exchange, after briefly topping $70 for the first time since November in the previous session. The global benchmark crude was at a premium of $7.06 to WTI for the same month.