Oil steady as players take stock of Middle East supply concerns

Oil prices were steady in early trading on Friday as investors weighed supply concerns in the Middle East against signs of weakened demand.

Brent crude futures for October delivery expire on Friday and were unchanged at 0033 GMT. The more actively traded contract for November fell 7 cents or 0.09% to $78.75. U.S. West Texas Intermediate crude futures were down 11 cents, or 0.14%, to $75.80.

Both contracts settled more than $1 higher on Thursday driven by oil supply concerns.

More than half of Libya’s oil production, or about 700,000 barrels per day (bpd), was offline on Thursday and exports were halted at several ports following a standoff between rival political factions.

Libyan production losses could reach between 900,000 and 1 million bpd and last for several weeks, according to consulting firm, Rapidan Energy Group. Meanwhile, Iraqi supplies are also expected to shrink after the country’s output surpassed its quota agreed with OPEC+, 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. However, oil prices remained on track for a second month of decline.

Oil dipped 1% on Wednesday after data showed a U.S. crude stock draw around a third smaller than expected, with inventories slipping 846,0000 to 425.2 million, compared with a 2.3 million barrel draw forecasted by analysts in a Reuters poll.

“The market is concerned about the medium-term outlook, with oil balances for 2025 looking weak,” ANZ analysts said in a note.

“We believe OPEC will have no choice but to delay the phase out of voluntary production cuts if it wants higher prices,” ANZ said.

The Organization of the Petroleum Exporting Countries (OPEC) and allies, together known as OPEC+, is set to gradually phase out voluntary production cuts of 2.2 million barrels per day over the course of a year from October 2024 to September 2025.