Brent records 2.2 per cent weekly gain despite mounting global risks
Oil prices rise ahead of deadline for US sanctions on Iran
Oil rose on Friday, clawing back some territory after prices fell by the most in a month in the previous session, as the focus returned to supply concerns ahead of a November deadline for US sanctions on Iranian crude.
Brent crude was up 25 cents at $78.43 a barrel by 0810 GMT. The global benchmark fell 2 per cent on Thursday after rising on Wednesday to its highest since May 22 at $80.13.
US West Texas Intermediate (WTI) futures were up 41 cents at 69.00 a barrel after dropping 2.5 per cent on Thursday.
Both futures contracts are set to rise around 2 per cent in the week. “We think the oil market will have another go at pushing Brent above $80 a barrel,” said Harry Tchilinguirian, oil strategist at French bank BNP Paribas.
“The looming supply gap that the loss of Iranian oil exports represents is still ahead of us and that early November US deadline to reduced imports to zero is fast approaching.”
The United States is renewing sanctions on Iran after withdrawing from a nuclear deal forged in 2015 between Tehran and world powers.
Washington re-imposed some of the financial sanctions from August 6, while those affecting Iran’s petroleum sector will come into force from November 4.
Indian refiners, traditionally major buyers of Iranian crude, will cut their monthly crude loadings from Iran for September and October by nearly half from earlier this year.
Supply concerns were stoked by data showing that US crude production fell by 100,000 barrels per day to 10.9 million barrels per day last week as the industry faced pipeline capacity constraints.
Meanwhile, the International Energy Agency on Thursday warned that although the oil market was tightening and world oil demand would reach 100 million bpd in the next three months, global economic risks were also mounting.
“As we move into 2019, a possible risk to our forecast lies in some key emerging economies, partly due to currency depreciations versus the US dollar, raising the cost of imported energy,” the agency said.
“In addition, there is a risk to growth from an escalation of trade disputes,” the Paris-based agency said.
China will not buckle to US demands in any trade negotiations, the major state-run China Daily newspaper said, while US President Trump said on Twitter he felt no pressure to strike a deal with China.