Oil headed for a weekly gain after a pipeline shutdown in Nigeria eased, but did not dispel, concerns about rising OPEC output.
Futures were little changed in New York, heading for a weekly increase of 4.3 per cent. Royal Dutch Shell’s local unit invoked force majeure, a legal clause enabling the suspension of deliveries, on exports of the Bonny Light grade after the halt of the Nembe Creek Trunk Line. While the disruption allayed some concerns that a production recovery in Nigeria is undermining OPEC’s efforts to clear a global glut, the rise in Libyan output continued.
Oil remains in a bear market on concern rising global supply will offset cuts by OPEC members and its partners. The group’s output climbed last month to the highest this year as members exempt from the deal -- Nigeria and Libya -- pumped more and others slipped in delivering their pledged curbs.
“Concern about potential supply disruptions in Nigeria are adding support to prices,” said Jens Naervig Pedersen, an analyst at Danske Bank in Copenhagen.
West Texas Intermediate (WTI) for August delivery was at US$46.16 a barrel on the New York Mercantile Exchange, up 8 cents at 2:01 p.m. in London. Total volume traded was about 28 per cent above the 100-day average.
Brent for September settlement rose 2 cents to $48.44 a barrel on the London-based ICE Futures Europe exchange. Prices are up 3.7 per cent this week. The global benchmark traded at a premium of $2.12 to September WTI.