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Oil slumps but closes on 5% weekly gains

Category: Economy

Date: 2022-01-08T07:29:23+0000
Oil slumps but closes on 5% weekly gains

Shafaq News/ Oil prices settled lower on Friday, as the market weighed supply concerns from the unrest in Kazakhstan and outages in Libya against a U.S. jobs report that missed expectations and its potential impact on Federal Reserve policy.

Brent crude settled down 24 cents, or 0.3%, to $81.75 a barrel, while U.S. West Texas Intermediate (WTI) crude was down 56 cents, or 0.7%, at $78.90 a barrel.

Brent gained 5.2%, while WTI gained 5% in the first week of the year, with prices at their highest since late November, spurred on by the supply concerns.

In Kazakhstan's main city Almaty, security forces appeared to be in control of the streets and the president said constitutional order had mostly been restored, a day after Russia sent troops to put down an uprising.

The protests began in Kazakhstan's oil-rich western regions after state price caps on butane and propane were removed on New Year's Day.

Production at Kazakhstan's top oilfield Tengiz was reduced on Thursday, its operator Chevron Corp said, as some contractors disrupted train lines in support of protests taking place across the central Asian country. 

Production in Libya has dropped to 729,000 barrels per day from a high of 1.3 million bpd last year, partly due to pipeline maintenance work.

A barrel of oil for delivery in March was selling at a discount of as much as 70 cents to a barrel for delivery in February, the highest since November.

Both benchmarks were up $1 earlier in the session but oil, along with stock markets and the dollar, came under pressure after U.S. employment figures missed expectations.

Meanwhile, supply additions from the Organization of the Petroleum Exporting Countries, Russia and allies - together called OPEC+ - are not keeping up with demand growth.

OPEC's output in December rose by 70,000 bpd from the previous month, versus the 253,000 bpd increase allowed under the OPEC+ supply deal which restored output slashed in 2020 when demand collapsed under COVID-19 lockdowns.

Government data this week also showed that crude inventories in the United States, the world's top consumer, have fallen for six consecutive weeks by the end of the year to their lowest since September.

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