Oil falls after Libyan warlord says exports can resume

Oil fell on Friday, paring its biggest weekly gain since June, as Libyan military commander Khalifa Haftar said he will allow crude production and exports to resume.

Futures slid 0.7% in New York following the announcement from Haftar, who controls most of eastern Libya and has halted operations and shipments from his territory as part of a campaign against the internationally recognized Tripoli government. The OPEC member is pumping just 80,000 bbls/d, but produced 1.2 million a day last year.

West Texas Intermediate for October delivery fell 26 cents to US$40.71/bbl on the New York Mercantile Exchange as of 8:00 a.m. local time, after climbing two per cent on Thursday. Brent for November settlement slipped 30 cents to US$43.00/bbl on the ICE Futures Europe exchange, after rising 2.6 per cent in the previous session.

Nonetheless, prices remain nine per cent higher this week, buoyed by a show of determination to defend the market on Thursday from Saudi Arabia, the most influential nation in OPEC. The Saudis hinted they’re prepared for new production cuts, and lambasted OPEC+ members that have cheated on production quotas.

“All in all, the strong reiteration of OPEC+’s commitment with its planned supply cuts is welcome news to the bulls in the market,” said Harry Tchilinguirian, head of commodities strategy at BNP Paribas SA.

© 2020 Bloomberg L.P.