Despite rising U.S. crude inventories and a strong dollar, countered by an expected supply deficit over the coming months, oil prices held steady on Thursday. They previously rose above $80 a barrel this week.
In the week to Sept. 24, U.S. oil and fuel stockpiles rose by 4.6 million barrels to 418.5 million barrels, the U.S. Energy Department’s Energy Information Administration (EIA) said on Wednesday.
Meanwhile, the U.S. dollar held near one-year highs; thus, oil is made more expensive for holders of other currencies.
Expectations of a continued supply deficit lifted prices. Even with continued supply increases, Citigroup (NYSE:C) is estimating oil balances to be in a 1.5 million barrel per day deficit on average over the next six months.
During the session, Brent crude for November delivery went in and out of positive territory. By 1107 GMT, the contract dropped 21 cents at $78.43 a barrel on its expiry day and December loading crude was at $77.92. Moreover, U.S. oil slipped 18 cents to $74.65.
The Organization of the Petroleum Exporting Countries and allies including Russia (OPEC+) are expected to hold to an agreement to add 400,000 barrels per day (bpd) to their output for November next week.
Norway Set to Shut its Last Arctic Coal Mine in 2023
On Thursday, Norway’s state-owned coal company said it will close its last mine in the Arctic Svalbard archipelago in 2023. A loss of 80 jobs is expected as well as an end to 120 years of exploitation.
Over the past two decades, Store Norske Spitsbergen Kullkompani (SNSK) has shut its major mines in the islands. But It had kept the smaller Mine 7 open. Primarily, that is to ensure supplies to a local coal-fired power plant and also some exports.
The Arctic islands are warming faster, which highlights the risks to fragile ecosystems from climate change. With that, Norway aims to cut its overall emissions, albeit, it also remains to be a major oil and gas producer.
The SNSK said Svalbard’s main settlement will temporarily switch its energy source to diesel in 2023. That’s before establishing a permanent renewable electricity supply; thus, negating the need for a local coal supply.
In a statement, Chief Executive Morten Dyrstad said, now that the contract to supply the power plant has been terminated, there will no longer be a basis for operating the mine.