Oil is set to decline since early September on rising global output as Tropical Storm Nate makes its way toward the U.S. Gulf.
Futures dropped 1 percent in New York, increasing the weekly drop to 2.7 percent. OPEC output climbed during the month of September while last week U.S. production reached a two-year high and Libya resumed their largest oil field. Companies from BP Plc to Chevron Corp. are closing platforms in Gulf preparing for Tropical Storm Nate, forecasted to become hurricane by Saturday.
During September oil rallied on the idea of increased demand, prices fought to stay above $52 a barrel as supply grew in the U.S. and two members of OPEC exempt from making reductions. Saudi Arabia and Russia both reassured their support to extend the agreement with OPEC until the end of 2018.
“Higher OPEC production in September as well as the prompt return of supplies from Libya after the brief closure of their biggest field weighed on oil futures this week,” according to analyst Giovanni Staunovo.
West Texas Intermediate for November was at $50.27 a barrel, on the New York Mercantile Exchange, a decrease of 52 cents and total volume traded was 24 percent below the 100-day average. On Thursday, prices increased 81 cents to $50.79, the first increase in four periods.
Brent for December dropped 29 cents to $56.72 a barrel, on the London-based ICE Futures Europe exchange, down a total of 1.4 percent for the week. The global benchmark crude traded at a premium of $6.11 to December WTI.
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In September the OPEC pumped 32.83 million barrels per day which is a 120,000 BPD increase from August. Production at Libya’s Sharara field increased to 200,000 BPD. U.S. oil output increased by 14,000 BPD to 9.56 million per week.