Investing.com — Oil prices edged higher on Thursday, underpinned by persistent supply risks as crude production collapsed in Libya, while Iraq outlined plans to cut output from next month.
At 2:30 PM ET (1830 GMT), the stock rose 1.7% to $77.86 per barrel, while it rose 1.9% to $75.95 per barrel.
SRisks to delivery remain as production in Libya falls and Iraq plans to cut supplies
Libya halted production of more than half of its output on Thursday, taking about 700,000 barrels per day offline, Reuters reported, citing its own calculations.
The Central Bank of Libya is the only internationally recognized depository for payments for Libyan oil exports, and is controlled by the internationally recognized government in the west of the country.
But the eastern side, which holds most of the country’s oil fields and is controlled by separate leaders, recently called for a change in central bank leadership and halted all oil production.
Libya produced around 1.2 million barrels per day in July, with any prolonged production disruptions heralding a global shortage of oil supplies.
Adding to supply risks, Iraq said it plans to cut oil production in September as it looks set to honor OPEC’s output cut agreement after a period of above-quota output.
US economic data to follow
grew 3% in the latest quarter, a Commerce Department report showed in its second estimate, better than expectations of 2.8% growth and a jump from 1.4% growth on annual basis in the first three months of the year.
The upside surprise in economic growth cooled fears that the economy is headed for a significant slowdown. As the largest oil consumer, a stronger US economy suggests crude oil demand is likely to remain intact.
The improved figures come just a day after inventory data showed a smaller-than-expected decline in weekly crude oil supplies, pointing to weakening demand as the summer period draws to a close.
US inventories are falling less than expected
In the week to August 23, the US saw a smaller-than-expected draw of 0.85 million barrels, data from the Energy Information Administration showed on Wednesday.
The inventories had a larger than expected draw, but saw an unexpected build-up.
The mixed inventory numbers raised concerns that U.S. oil demand will cool as the busy summer season comes to an end. Fears that a slowing US economy will weigh on demand also continued to play a role, following a series of weak labor market data in recent weeks.
(Peter Nurse, Ambar Warrick contributed to this article.)
