Crude prices slid after oil workers in Norway called off a strike that had shut down about 8 percent of the country’s production.
Futures in London and New York both fell more than 1 percent on Friday.
The settlement would restore production at six fields shut down by the dispute and prevent an escalation to another six. It also averts the shutdown of Norway’s largest oil field, the 460,000 barrel-a-day Johan Sverdrup facility.
Still, Brent futures posted the largest weekly gain since June and US benchmark crude futures also advanced this week on supply disruptions from Hurricane Delta and optimism on a US stimulus deal.
“If the strike lasted into next week or even beyond, that would mean a significant additional amount of platforms and fields that were impacted by the strike,” Tradition Energy Group director Gary Cunningham said. “Now that it’s resolved, not only are the incremental curtailments not going to happen, but now the original production is going to come back online.”
Futures were boosted this week amid US President Donald Trump’s departure from the hospital following treatment for COVID-19 and mounting enthusiasm over a US virus aid package, which would help spur a demand recovery.
West Texas Intermediate crude for November deliver on Friday fell 1.43 percent to US$40.60 a barrel, but still posted a 9.6 percent weekly gain.
Brent crude for December delivery on Friday lost 1.13 percent to settle at US$42.85 a barrel, rising 9 percent for the week.
The COVID-19 pandemic has been forcing governments worldwide to rethink reopening plans: Spain’s government has declared a state of emergency for the Madrid region.
Meanwhile, US Secretary of the Treasury Steven Mnuchin on Friday headed into talks with US House of Representatives Speaker Nancy Pelosi, carrying a White House offer of US$1.8 trillion for economic stimulus, people familiar with the matter said.
The two spoke for about 30 minutes and Mnuchin’s proposal “attempted to address some of the concerns Democrats have,” Pelosi spokesman Drew Hammill said on Twitter.
“This is a very positive development,” Again Capital LLC partner John Kilduff said. “The petroleum complex needs a stimulus package as badly as any of the other asset classes, maybe even more so. To the extent that this gets the economy sort of stabilized, or maybe revived, that portends well for demand going forward.”
Hurricane Delta has weakened to a Category 2 storm with winds of 177kph. Energy companies have evacuated staff from offshore and onshore facilities.
Additional reporting by staff writer
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