Oil Heads for Third Weekly Advance as Constraints Tighten Market -Breaking
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(Bloomberg). — The market was on track for a third week of gains as oil prices rose due to tightening supply in OPEC+ member countries following civil unrest.
New York’s futures rose almost 6% during the four previous sessions and traded close to $80 a barrel on Monday. Kazakhstan’s biggest oil producer has altered output at the giant Tengiz field following protests in the country, while Libyan production has also been crimped. Oil’s market structure has firmed in a bullish backwardation structure, signaling growing supply tightness.
The OPEC+ group maintained its February output target of 400,000 barrels/day, however it is not likely to exceed that number as many members have difficulty achieving their objectives. Due to militia unrest, Libya’s output has dropped and Russia was unable to improve its output.
See also: World’s Most Dramatic Fuel Protests to Stay Local: Oil Strategy
The operator of Kazakhstan’s Tengiz field, known as TCO, declined to provide further details on the size of the output adjustment, but it said that production operations were continuing. TCO, a joint venture headed by Chevron Corp. (NYSE:) that pumps about a third of Kazakhstan’s oil.
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