NEW YORK (Reuters) – Oil prices slipped more than 1% on Friday after an oil worker strike in Norway ended, which should boost crude output even as Hurricane Delta forced U.S. energy firms to cut production.

Brent futures

fell 49 cents, or 1.1%, to settle at $42.85 a barrel, while U.S. West Texas Intermediate (WTI) crude

fell 59 cents, or 1.4%, to settle at $40.60.

Despite Friday’s price slide, both benchmarks gained about 9% this week, their first increase in three weeks and the biggest weekly rise for Brent since June.

Oil futures climbed earlier in the week due to concerns the strike in Norway and the hurricane headed for the U.S. Gulf Coast would cut crude output.

Norwegian oil firms struck a wage bargain with labour union officials on Friday, ending a 10-day strike that had threatened to cut the country’s oil and gas output by close to 25% next week.

“One of the bullish factors that had been supporting prices fell apart late in the day when it was announced that Norway would end their strike,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.

Also weighing on prices were doubts voiced by Republicans in the U.S. Senate that a coronavirus economic stimulus deal could be reached before the Nov. 3 election.

Earlier in the day, oil prices briefly turned positive after U.S. House Speaker Nancy Pelosi said she would resume talks on a possible $1.8 trillion COVID-19 stimulus package with Treasury Secretary Steven Mnuchin.

Hurricane Delta, meanwhile, dealt the greatest blow to U.S. offshore Gulf of Mexico energy production in 15 years, halting most of the region’s oil and nearly two-thirds of natural gas output.

Looking ahead, JP Morgan said that a worsening global oil demand outlook due to a potential rise in coronavirus cases

Oil price is on track for the biggest weekly gain since May driven by a Norway strike and Hurricane Delta that has threatened output. Both U.S. crude and Brent are up around 10% this week, marking the first rise in three weeks.

Norway Strike

A strike by oil workers in Norway could cut output from western Europe’s biggest oil and gas producer by almost a quarter by Oct 14 (read: Top & Flop ETF Zones of First Nine Months of 2020).

The dispute began on Sep 30 when wage talks between the Lederne union and the organization representing oil companies collapsed. However, the first production outages began on Oct 5. According to the Norwegian Oil and Gas Association, six offshore oil and gas fields were shut on Oct 5. This has reduced output capacity by 8% or around 330,000 barrels of oil equivalent per day (boepd). U.S. oil major ConocoPhillips (COP) planned shutdown of its Ekofisk 2/4 B platform, with output of 7,000 billion boepd, on Oct 10 if the strike continues. Six more oil and gas fields could fully or partly close by Oct 14, including the Ekofisk platform.

The biggest outage would be at Equinor’s Johan Sverdrup oilfield, the North Sea’s largest oilfield with an output capacity of up to 470,000 barrels of oil per day. Overall, 941,000 boepd are expected to go offline so far. The Norwegian Oil and Gas Association expects the extended strike to cut 25% of production.

Hurricane Delta

The hurricane Delta has forced to shut down nearly 1.5 million barrels per day (bpd) of oil output in Gulf of Mexico. It has halted nearly 90% of the Gulf of Mexico’s crude output.

Saudi Arabia View

Per The Wall Street Journal, Saudi Arabia is considering the cancellation of plans for the Organization of the

By Shadia Nasralla

LONDON (Reuters) – Oil prices fell on Friday, erasing earlier gains but still leaving both benchmarks on track for their biggest weekly gains since early June on the back of supply cuts caused by a storm in the Gulf of Mexico and a strike of offshore workers in Norway.

Brent <LCOc1> was down 27 cents at $43.07 a barrel by 0908 GMT. U.S. West Texas Intermediate (WTI) crude <CLc1> fell 28 cents to $40.91.

Both contracts are on track for weekly gains of about 10% this week, the first rise in three weeks.

Brent’s six-month contango, a market structure where the front-month Brent futures are trading at a discount to later contracts implying current oversupply, has shrunk to around $1.90 a barrel from $3.24 less than a month ago.

Norwegian oil company and labour officials said they would meet with a state-appointed mediator on Friday in an attempt to bring an end to a strike.

An escalation could almost triple the existing outage if no solution is reached by Oct. 14, taking the total capacity cut to about 934,000 barrels of oil equivalents per day.

“It goes without saying that a resolution to the conflict would pull the rug from under bulls’ feet,” PVM analysts said in a note.

In the Gulf of Mexico, Hurricane Delta has shut 1.67 million barrels per day, or 92% of the Gulf’s oil output, the most since 2005 during Hurricane Katrina. Producers have also halted nearly 62% of the region’s natural gas output, or 1.675 billion cubic feet per day.

The Organization of the Petroleum Exporting Countries (OPEC) said on Thursday world oil demand will plateau in the late 2030s and could by then have begun to decline.

(Additional reporting by Aaron Sheldrick in Tokyo; Editing by Elaine Hardcastle, Robert Birsel)

(Bloomberg) — Norway’s government is set to take out a record amount of cash from its sovereign wealth fund this year, and to continue pumping historic amounts of stimulus into the economy in 2021, to fight the “severe setback” triggered by the Covid crisis.



a group of people walking down a busy city street: The Gronland neighborhood in Oslo, Norway.


© Bloomberg
The Gronland neighborhood in Oslo, Norway.

Withdrawals from the fund will surge to an all-time high of 346.5 billion kroner ($37 billion) in 2020, followed by 273 billion kroner next year, Norway’s finance ministry said on Wednesday.

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That’s more than the wealth fund generates in cash flow, which was 131 billion kroner in the first half of the year. For all of 2019, when the fund booked record returns, its cash flow reached 249 billion kroner. Assuming an unchanged cash flow in 2020, the fund will need to liquidate about $10.5 billion worth of assets to meet government withdrawals.

The investor has already started selling off bonds to keep up with withdrawals, it said in August. “If something has to be sold, the fund’s relative positions have to remain constant,” its spokesperson Thomas Sevang said in an emailed comment on Wednesday. “We sell the broad reference portfolio, and we usually take it from the most liquid portfolios.”

Stimulus in Action

Norway faces a milder recession than most of the rest of Europe. That’s in large part thanks to its $1.1 trillion wealth fund, which gives the government room to add record stimulus without tapping bond markets. The finance ministry estimates that GDP will shrink 3.1% in 2020, compared with an expected slump of about 8% in the euro zone.

Finance Minister Jan Tore Sanner has promised to do “everything in our power to ensure that Norway emerges from this crisis in the best possible position.” That’s as the coronavirus pandemic inflicts “the

OSLO (Reuters) – Norway’s Lederne labour union will expand its ongoing oil strike from Oct. 10 unless a wage bargain can be reached in the meantime, it said on Tuesday, confirming a statement from the country’s state-appointed wage mediator.

Six offshore oil and gas fields shut down on Monday as Lederne ramped up its strike, cutting output capacity by 8%, or around 330,000 barrels of oil equivalent per day (boed), according to the Norwegian Oil and Gas Association (NOG).

The planned Oct. 10 escalation would hit four additional fields operated by Equinor

and ConocoPhillips

but it was too early to say how it would affect oil and gas output, a spokesman for the NOG said.

The dispute began on Sept. 30 when wage talks between Lederne and the NOG collapsed, but the first production outages only started on Oct. 5.

Lederne earlier on Tuesday sent a proposal for a solution to the NOG, but its terms were not met, it later said.

“We received a reply from the NOG to our proposal, but it was not specific enough, and we have decided to escalate the strike,” Lederne union chief Audun Ingvartsen told Reuters.

“I hope that the escalation could still be avoided if the NOG comes back with a better proposal,” he added.

An escalation of the strike would add 93 more workers to the 169 who are already part of the conflict, out of a total 1,003 offshore members represented by Lederne.

Equinor’s Oseberg South, Oseberg East and Kristin fields, as well as the ConocoPhillips-run Ekofisk Bravo/Kilo installation would be added to the strike, the NOG said.

The conflict gave a boost to global oil prices for a second straight day on Tuesday.

Gas supplies from Norway to the rest of Europe were recovering some lost ground on Tuesday,