Crude Caps Weekly Advance as Iran Sanctions Bite Into Supply
(Bloomberg) -- Crude posted a third weekly advance out of four as Iranian sanctions take center stage, with investors eyeing the impact on supply.
Futures in New York closed 1.8 percent higher this week amid signs that looming U.S. sanctions on Iran are whittling global supply levels. The International Energy Agency warned of higher oil prices amid deepening supply losses in Iran and Venezuela.
“It looks like the reality of sanctions are happening pretty quickly,” said Phil Flynn, senior market analyst at Price Futures Group Inc. in Chicago. “The risk of being short went up dramatically.”
Oil in New York has topped $71 a barrel this month and Brent hit $80 as Iranian sanctions threaten to further cut into available supply, overshadowing concerns over U.S.-China trade tensions even as U.S. President Donald Trump is said to want $200 billion in China tariffs despite talks with Beijing. Oil is more likely to rise than fall in part due to strong geopolitical constraints, according to Arc Energy Research Institute.
“There is a lot of concern about what winter is going to bring in terms of tight supplies when the Iran sanctions really kick in full blast,” said John Kilduff, a partner at New York-based hedge fund Again Capital LLC.
West Texas Intermediate futures for October delivery rose 40 cents to settle at $68.99 a barrel on the New York Mercantile Exchange. Total volume traded was about 3 percent below the 100-day average.
Brent for November settlement fell 9 cents to $78.09 a barrel on the ICE Futures Europe exchange. The contract is up 1.6 percent this week. The global benchmark traded at a $9.32 premium to WTI for the same month on Friday.
Some other key oil-market figures, news and events:
Gasoline futures slid 1.1 percent to settle at $1.9702 a gallon on Friday. Hurricane Florence made landfall near Wrightsville Beach, North Carolina, battering the region with water and wind, threatening to unleash widespread destruction and stranding some people. Shale explorers added the most oil rigs in a month this week, even as pipeline bottlenecks depress prices in America’s busiest basin while growth migrates to other plays. Money managers increased their bullish ICE Brent crude oil bets by 23,332 net-long positions to 440,074, weekly ICE Futures Europe data on futures and options show.
With assistance from Tsuyoshi Inajima, Sharon Cho and Grant Smith. To contact the reporters on this story: Jessica Summers in New York at firstname.lastname@example.org; Robert Tuttle in Calgary at email@example.com. To contact the editors responsible for this story: Pratish Narayanan at firstname.lastname@example.org; James Herron at email@example.com Debarati Roy, Mike Jeffers.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.