Crude Oil Drifts Into the Weekend; Libya Lashes out at Russia By

© Reuters.

By Geoffrey Smith — Crude oil price drifted sideways on Friday as the week ended on a flat note, with markets barely reacting to U.S. personal income numbers for May, a data series that is usually a reliable indicator of the buoyancy (or otherwise) of consumer spending.

By 9:30 AM ET (1330 GMT), futures were down 0.5% at $38.51, while the international benchmark was down 0.1% at $41.02. Both blends had stayed in relatively tight ranges overnight.

Crude prices have effectively gone nowhere in June, after rebounding from a freak dip below zero in April at the depths of the pandemic. The physical market has tightened significantly in recent weeks, as demand has rebounded while output has been capped both voluntarily from the OPEC+ group of producers, and forcibly in North America due to unprofitable economics and the drying up of finance.

However, any further tightening of the market may have to wait, as the new wave of coronavirus infections across the U.S. casts a new shadow over the outlook for demand in California, Texas and Florida, three of the most economically important U.S. states. Along with California, those states represent three of the four biggest regional centers of demand for motor fuel.

Texas and Florida were both forced to suspend their plans for reopening their state economies on Thursday as the level of new Covid-19 infections hit a record. The nationwide number for new cases also hit a new high of nearly 40,000.

Further afield, the issue of OPEC+ compliance took on a new dimension as the Libyan National Oil Company accused Russian mercenaries of sabotaging operations at the country’s largest oilfield Sharara. The field has been unable to ship crude and generate much needed export revenues due to the long-running civil war in the north African country.

“Libya’s oil is for the Libyan people, and I completely reject attempts by foreign countries to prevent the resumption of oil production,” NOC chairman Mustafa Sanalla said in a Facebook (NASDAQ:) post. “Many countries are themselves benefitting from the absence of Libyan oil from global markets. Some of them cynically express their public regret for Libya’s continued inability to produce oil while all the time working in the background to support blockading forces.”

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