Both West Texas Intermediate and Brent crude benchmarks rose on Friday but are set to close the week lower on prospects for a rise in Libyan oil exports after rebels blocking shipments from the country’s eastern ports said they have reached a principle agreement with the government to reopen the terminals. Simmering tension between Russia and the West however kept the markets underpinned. Investors also eyed the upcoming key employment data from the US to gauge how the world’s biggest economy and oil consumer fared. Meanwhile, natural gas futures declined, as weather forecasting models called for springlike weather to return in many densely-populated US areas by the end of next week, curbing demand for the power-station fuel.
On the New York Mercantile Exchange, WTI crude for delivery in May rose by 0.86% to $101.15 by 13:51 GMT, having shifted in a daily range between $101.40 and $100.28 per barrel. The US benchmark rose by 0.7% on Thursday to settle at $100.29 a barrel but is set for its biggest weekly decline in three.
Meanwhile on the ICE, Brent futures for delivery in the same month stood at $106.69 per barrel, up 0.5% on the day. Prices held in a range between day’s high and low of $106.87 and $106.10 per barrel. The European crude benchmark rose by 1.3% on Thursday to $106.15 a barrel, but is on track to post its poorest weekly performance since January. Brent’s premium to its US counterpart widened to $5.85, after settling at $5.86 on Thursday, up from $5.17 on Wednesday, which was the narrowest since October 2nd.
Oil prices drew support amid simmering tensions between Russia and the West. Moscow has almost doubled its gas price for Ukraine this week after a second hike on Thursday, pressuring the Ukrainian economy, which will rely on Western financial help to avoid bankruptcy.
However, a possible resumption of exports from vital eastern ports in Libya kept the market pressured and set for weekly losses. Rebels, who have blocked the terminals since last summer, said they agreed in principle with the government to allow a resumption, which could bring up back online a capacity of 600 000 bpd, compared to the country’s current output of around 150 000 bpd. Libya, holder of Africa’s biggest crude reserves, produced an average of 1.4 million bpd before protests and blockages began last summer.
Meanwhile, on the New York Mercantile Exchange, natural gas for delivery in May traded at $4.461 per million British thermal units at 13:52 GMT, down 0.21% on the day. Prices held in a daily range between $4.476, and $4.405 per mBtu. Yesterday, the energy source added 1.5%, after a government report showed much-larger-than the five-year average inventory drop.
Natural gas prices were pressured by weather forecasts that called springlike weather may return to the US by next week. NatGasWeather.com reported today that after April 11th much milder temperatures will push into many US regions, significantly easing demand for the power-station fuel.