Oil prices continue to surge after recovery of Libyan output

Samir Tounsi/AFP/Getty Images

MarketWatch – Oil prices climbed Friday and for the week, with traders encouraged by signs that major oil producers will adhere to the pledge to curb output but still concerned about potential production increases in the U.S. and Libya.

Prices traded lower earlier amid news that Libya has restarted operations at two key oil fields.

On the New York Mercantile Exchange, January West Texas Intermediate crude CLF7, +2.22% added 74 cents, or 1.5%, to $51.65 a barrel. For the week, prices were poised for a gain of 0.3%.

February Brent crude LCOG7, +2.43% added 80 cents, or 1.5%, to $54.82 a barrel on London’s ICE Futures exchange, with prices trading roughly 0.9% higher for the week.

“Oil prices are rising as it is becoming clear that the [output] cuts are for real,” said Phil Flynn, senior market analyst at Price Futures Group.

The market has seen some signs of planned compliance with the output pact among members of the Organization of the Petroleum Exporting Countries and other oil producers.

State-run Kuwait Petroleum Corp. said that shipments of oil would be reduced Jan. 1 to U.S. and European customers, according to a report Thursday, said Flynn.

Oil producers who are taking part in the deal have “already taken steps to do what they say they are going to do which, by my estimation, will put oil in a global supply deficit early next year,” he added. “The news about Kuwait would have driven the market even higher except for the fact that the dollar was raging [Thursday] with no sign of stopping.”

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