Oil prices rose early on Monday, extending gains from Friday, as supply took center stage on the market with potential new production cuts from OPEC+ and deadly clashes in Libya which renewed concerns about Libyan oil exports.
As of 11:45 a.m. ET on Monday, WTI Crude was up by 2.98% at $96.04. The international benchmark, Brent Crude, traded at $104, up by 2.98% on the day.
Brent returned above the $100 per barrel mark last week and has traded above that threshold for most of the past five days, after Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, said that OPEC+ was ready to cut production at any time in any form if it believes it would bring stability to the “schizophrenic” oil market.
After the Saudi signal, OPEC’s rotating president for this year, Congo’s Hydrocarbons Minister Bruno Jean-Richard Itoua, also expressed support for potential cuts. The United Arab Emirates (UAE) has similar views to Saudi Arabia on the crude oil markets, a source familiar with the UAE’s thinking said on Friday, as speculation intensifies over whether the OPEC+ group would consider making new cuts to production again.
Some other OPEC+ producers, including Iraq, Venezuela, and Kazakhstan, have also signaled support for new production restrictions.
OPEC+ meets on September 5 at a regular meeting, but it’s not a given yet that it would discuss new production cuts.
Another supply concern came this weekend from Libya, the most volatile OPEC producer and one exempted from the OPEC+ cuts due to its dire security situation. Clashes between rival factions in the capital Tripoli left at least 32 people dead and dozens more wounded this weekend, stoking renewed concern of a larger military conflict that could choke Libya’s oil exports, again.
The OPEC+ group’s next move and the volatile situation in Libya trumped early on Monday concerns about the global economy, the strong U.S. dollar, and the Friday speech of Federal Reserve’s Chair Jerome Powell, who said that large interest rate hikes could continue and could slow the economy “for some time.”