Oil climbs on supply concerns as storm nears Gulf of Mexico: market wrap

Energy producers have begun evacuating staff from rigs in the Gulf of Mexico. (Reuters)
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  • Brent and WTI headed for biggest weekly gains since June 2020
  • OPEC+ to meet next week to discuss output increase

LONDON: Crude oil prices jumped on Friday as producers started to suspend operations in the Gulf of Mexico in preparation for the possible arrival of a hurricane this weekend.

Brent crude futures rose 1.6 percent to $72.18 at 2:41 p.m. in London. WTO, the US benchmark, added 1.9 percent to $68.73.

Both grades were set for their biggest weekly advances since June 2020, with Brent 11 percent higher and WTI up 10 percent.

Mexico expects an average price of $60 per barrel for its crude oil exports, as well as an average crude production of 1.9 million barrels per day in 2022, as state-owned Pemex struggles to increase output, a government source told Reuters.

The Arabian Gulf Oil Company is unable to continue its activity and carry out its work because it does not have the necessary funds, the Libyan state-owned company said on its Facebook account.

The company has been conducting business without access to the budgets of 2020 and 2021 despite repeated promises from the government, the company said.

The group managing director of the Nigerian National Petroleum Corporation, Mele Kyari, on Thursday said there would be no more losses from the national oil company and it may embark on an initial public offering after its posted its first profit in its 44-year history.

Legislation signed by President Muhammadu Buhari this month enables the Nigerian National Petroleum Corp. to offer shares to the public, Managing Director Mele Kyari said at a briefing Thursday in the capital, Abuja.

The company would draw on the experience of Saudi Aramco, which listed in 2019, he said.

“There is no date on it, but there is a possibility of doing this,” Kyari said. “Obviously because you have made profit today doesn’t mean you are ready for IPO. It is a very, very long, tedious process.”

Events in the oil market next week will likely be dominated by OPEC+ nations, led by Saudi Arabia and Russia, who meet on Wednesday to decide whether to proceed with planned oil production increases amid concern the COVID-19 delta variant will crimp demand.

Traders will also ready themselves for monthly estimates of OPEC+ export and production