U.S. West Texas Intermediate is trading lower on Friday after giving back earlier gains. Some traders are saying the markets are taking a breather from the nearly 10% run-up this week, but we could be looking at profit-taking related to an easing of concerns over Hurricane Delta as it makes its way toward oil production facilities near the Louisiana coast. Additionally, there are reports that the strike could end later today.
Week-Long Price Surge Driven by Norwegian Strike
Oil prices are easing early Friday in a breather at the end of a week of big gains propelled by a strike in Norway that raised the prospect of supply from the major producer being slashed by up to 25%.
“This could see almost one million barrels a day of crude oil impacted,” ANZ Research said in a note.
Norwegian oil company and labor officials said they will meet a state-appointed mediator on Friday in an attempt both sides hope will bring an end to a strike that threatens to strip out about a quarter of the country’s oil and gas output.
Output Halted by Hurricane Delta
Traders are also bracing for the impact on U.S. production of Hurricane Delta, forecast to strike the Gulf Coast within hours. Nearly 1.5 million barrels of daily output has been halted so far.
This has now become a short-term event. Traders will be watching closely for any damage that could knock the platforms out for several days or weeks. Otherwise, companies will start implementing…