RIYADH: Oil dropped by about 2 percent on Friday, logging a second weekly decline, due to concern about weakened demand in China and further increases to US interest rates.
Brent crude settled at $87.62 a barrel, falling $2.16, or 2.4 percent. US West Texas Intermediate crude settled at $80.08 a barrel, losing $1.56, or 1.9 percent.
Both benchmarks posted weekly losses, with Brent down about 9 percent and WTI roughly 10 percent.
A stronger US dollar, which makes oil more expensive to non-American buyers, pushed down crude prices.
The market structure of both oil benchmarks shifted in ways that reflect dwindling supply concerns.
Crude came close to record highs earlier this year as Russia's invasion of Ukraine added to those worries. In addition, the front-month futures contract soared to a gigantic premium over later-dated contracts, a signal that people were worried about the immediate availability of oil and were willing to pay handsomely to secure supply.
Those supply concerns are waning. The current WTI contract is now trading at a discount to the second month, a structure known as contango, for the first time since 2021, Refinitiv Eikon data showed.
This condition will also benefit those looking to put more oil in inventories for later, especially with stocks still at low levels.
Bisat oilfield's third crude processing plant begins operations
Oman's state energy company OQ announced the start of operations at the third crude oil processing plant at Bisat oilfield, located in concession Block 60, Oman's state news agency said on Twitter on Saturday.
It added that the plant's production would rise to 60,000 barrels per day early next year.
Including the plant, OQ will have a production capacity of 219,000 bpd of oil equivalent, representing 12.6 percent of Oman's total oil production, the state news agency said.
Texas producer Ranger Oil explores sale
Ranger Oil Corp. is exploring a potential sale as the south Texas oil and gas producer looks to capitalize on high energy prices to pursue strategic options, people familiar with the matter said on Friday.
Ranger is working with an advisor and has actively started marketing itself to potential buyers, the sources said, requesting anonymity as these discussions are confidential.
Shares in Ranger, which operates in the Eagle Ford shale basin, jumped over 5 percent on Friday after Reuters reported the company's sale efforts. This gave the company a market value of around $1.9 billion.
The company also holds long-term debt worth $603 million as of Sept. 30, according to its latest earnings statement.
Ranger Oil did not immediately respond to a request for comment.
Elevated oil and gas prices have encouraged many private equity-backed or public energy companies to consider selling themselves, as their valuations have swelled in recent months. Ranger had gained around 58 percent this year, prior to news of its sale efforts.
The Eagle Ford has witnessed a flurry of deal activity in recent months. Its proximity to other major energy hubs, including the US Gulf coast, makes it an attractive location, while the basin is home to a number of smaller producers, which makes it easier for them to be absorbed by strategic players.
Marathon Oil Corp. struck a deal earlier this month to buy natural gas-focused assets from private equity-backed Ensign Natural Resources for $3 billion, while in September, Devon Energy Corp closed its deal to buy Validus Energy for $1.8 billion.
Based on recent comparable transactions, Ranger Oil's upstream assets are estimated to be worth between $2 billion and $2.2 billion, according to Dhriti Bafna, an M&A analyst at Rystad Energy.
Last year, Penn Virginia Corp bought Lonestar Resources US Inc in an all-stock deal valued at $370 million, and later rebranded the combined company as Ranger Oil.
(With inputs from Reuters)
