March 23, 2018 7:16 pm
Oil futures finished at an eight-week high Friday, as the growing risk of renewed sanctions on Iran and the possibility of an extension of OPEC production curbs into 2019 help prices notch their largest weekly gain since July.
Prices had suffered their worst hit in two weeks on Thursday, pressured by gains in U.S. production and as the risk of a global trade war weighed on financial markets the world over. But oil prices had been boosted earlier this week by growing concerns around U.S. relations with major oil producers Venezuela and Iran.
May West Texas Intermediate crude CLK8, +2.24% rose $1.58, or 2.5%, to settle at $65.88 a barrel on the New York Mercantile Exchange. That was the highest finish for a front-month contract since Jan. 26, according to FactSet data. It rose roughly 5.6% for the week.
May Brent crude LCOK8, +2.10% climbed $1.54, or 2.2%, to $70.45 a barrel on ICE Futures Europe. Brent has settled above $70 a barrel for the first time since late January. The contract scored a weekly jump of 6.4%.
Weekly percentage gains for the U.S. and global benchmarks were at the highest since the week ended July 28.
President Donald Trump on Thursday named former ambassador John Bolton as his new national security adviser, succeeding Lt. Gen. H.R. McMaster. Bolton is known for his hard-line views on Iran and North Korea, and previously served as U.S. ambassador to the United Nations under President George W. Bush.
Rob Fraser, commodity analyst at Schneider Electric, referred to Bolton as a “foreign policy hawk,” who has raised concerns “that the U.S. will reimpose sanctions on Iran, the third-largest oil producer in the Middle East.” Renewed sanctions on Iran would hamper output from the country.
Earlier in the week, Trump formally nominated Central Intelligence Agency Director Mike Pompeo to replace Rex Tillerson as secretary of state. Pompeo has been an outspoken critic of the 2015 Iran nuclear accord. The U.S. is due to review temporary waivers on sanctions against Iran in May.
The risk of renewed sanctions come after Saudi Arabia’s energy minister, Khalid al-Falih, said late Thursday that members of the Organization of the Petroleum Exporting Countries would need to continue to coordinate with non-OPEC producers on supply cuts next year, according to Reuters.
OPEC and 10 producers outside the oil cartel, including Russia, have been holding back crude output by 1.8 million barrels a day since the start of last year, a pact that they agreed to leave in place through at least the end of 2018 but could consider extending.
“A decision about this is to be taken at OPEC’s next meeting in June,” said Carsten Fritsch and the Commerzbank commodities team, in a note. “If al-Falih believes it necessary to maintain the cuts in 2019, he is essentially conceding that OPEC has no scope for raising production, in our opinion.”
Rising U.S. crude output has worked to offset OPEC’s efforts to tighten global supplies. On Friday, Baker Hughes BHGE, -1.95% reported a second straight weekly rise in the U.S. oil-rig count, hinting at a rise in future production.
Meanwhile, President Donald Trump announced tariffs Thursday on several billions of dollars of goods from China, sparking concerns over an increased risk for a global trade war and sending ripples of volatility through global financial markets.
April natural gas NGJ18, -1.18% fell 1% to $2.591 per million British thermal units, on track for a weekly loss of 3.6%.
—Christopher Alessi contributed to this article.Tags: Business
Categorised in: Business
This post was written by All Charts News