Oil rises more than 2% as supply outages outweigh recession fears



* For the week, Brent falls 1.3% while WTI rises 0.8%

* Norway oil and gas workers' strike could cut about 8% of output

* Libya announces force majeure over two ports and oilfield

* U.S. manufacturing activity slows more than expected in June

* U.S. oil rig count up by one this week -Baker Hughes (Updates with settlement prices, comments)

By Laila Kearney

NEW YORK, July 1 (Reuters) - Oil prices gained more than 2% on Friday as supply outages in Libya and expected shutdowns in Norway outweighed expectations that an economic slowdown could dent demand.

Brent crude LCOc1 futures settled at $111.63 a barrel, rising $2.60, or 2.4%. West Texas Intermediate crude (WTI) CLc1 settled at $108.43 a barrel, gaining $2.67, or 2.5%.

WTI and Brent traded at about 70% and 77%, respectively, of the previous session's volumes ahead of the U.S. Fourth of July holiday.

For the week, Brent lost 1.3%, while WTI rose 0.8%. For June, both benchmarks had ended the month lower for the first time since November.

Prices rose on Friday despite the release of industry data showing U.S manufacturing activity slowed more than expected last month, adding to evidence that the country's economy was cooling as the Federal Reserve tightens monetary policy.

Still, low crude and fuel supplies supported the oil market even as equities slumped and the U.S. dollar, which typically has an inverse relationship with crude, rose.

"The ability of the complex to post a strong advance today in the face of significant U.S. dollar strength and a weak equity trade suggests some refocus on tight oil supplies," Jim Ritterbusch, president of Ritterbusch and Associates LLC, said in a note.

A planned strike among Norwegian oil and gas workers on July 5 could cut the country's overall petroleum output by around 8%, or around 320,000 barrels of oil equivalent per day, unless a last-minute agreement is found over wage demands, a Reuters calculation showed.

Libya's National Oil Corporation on Thursday declared force majeure at the Es Sider and Ras Lanuf ports, as well as the El Feel oilfield. Force majeure is still in effect at the ports of Brega and Zueitina, NOC said.

Production has seen a sharp decline, with daily exports ranging between 365,000 and 409,000 barrels per day, a decrease of 865,000 bpd compared with production in "normal circumstances", NOC said.

The U.S. oil rig count, an early indicator of future output, rose by one to 595 this week, its highest since March 2020, according to energy services firm Baker Hughes Co BKR.O .

Even though the U.S. oil rig count has risen for a record 22 months through June, weekly increases have mostly been in single digits as many companies focus more on returning money to investors and paying down debt rather than boosting output.

Meanwhile, Ecuador's government and indigenous groups' leaders on Thursday reached an agreement to end more than two weeks of protests which had led to the shut-in of more than half of the country's pre-crisis 500,000-bpd oil output.

On Thursday, the OPEC+ group of producers, including Russia, agreed to stick to its output strategy after two days of meetings. However, the producer club avoided discussing policy from September onwards.

Previously, OPEC+ decided to increase output each month by 648,000 barrels per day (bpd) in July and August, up from a previous plan to add 432,000 bpd per month. A Reuters survey found that OPEC pumped 28.52 million bpd in June, down 100,000 bpd from May's revised total. U.S. President Joe Biden will make a three-stop trip to the Middle East in mid-July that includes a visit to Saudi Arabia, pushing energy policy into the spotlight as the United States and other countries face soaring fuel prices that are driving up inflation.

Biden said on Thursday he would not directly press Saudi Arabia to increase oil output to curb soaring prices when he sees the Saudi king and crown prince during a visit this month.
Additional reporting by Ahmad Ghaddar, Stephanie Kelly and Yuka Obayashi; Editing by Marguerita Choy and David Evans

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.