London — Oil prices edged up on Friday, setting both benchmark contracts on track for their biggest weekly gains since early June, due to supply outages caused by a storm in the Gulf of Mexico and a strike of offshore workers in Norway.
Brent was up 16 US cents at $43.50 a barrel by 7.48am GMT. US West Texas Intermediate (WTI) crude rose 14c to $41.33. Both contracts are on track for gains of about 11% this week, the first weekly rise in three weeks.
Brent’s six-month contango, a market structure where the front-month Brent futures are trading at a discount to later contracts implying current oversupply, has shrunk to about $1.90 a barrel from $3.24 less than a month ago.
Norwegian oil company and labour officials said they would meet with a state-appointed mediator on Friday in an attempt to bring an end to a strike.
An escalation could almost triple the existing outage from the strike if no solution is reached by October 14, taking the total capacity cut to around 934,000 barrels of oil equivalents per day.
In the Gulf of Mexico, producers have shut 1.69-million barrels per day of oil, or 92% of the region’s offshore oil, and 1.67-billion cubic feet per day, or nearly 62% of its natural gas output, bracing for the impact of Hurricane Delta.
“NonOpec production is going to take a big hit over the next couple of weeks and this will continue to drive the rebalancing of the oil market,” said Edward Moya, senior market analyst at Oanda.
Opec said on Thursday world oil demand would plateau in the late 2030s and could by then have begun to decline.