Futures rose 0.3 percent in New York, extending a third weekly gain. U.S. President Donald Trump’s administration imposed new sanctions on Iran and warned the Islamic Republic that it was “playing with fire” by testing missiles. U.S. drillers boosted the rig count by 17 to 583, the most since October 2015, according to Baker Hughes Inc.
U.S. crude futures have fluctuated above $50 since the Organization of Petroleum Exporting Countries and 11 other nations started curbing output Jan. 1. While OPEC members have implemented most of their cuts and Russia says its own reductions are ahead of schedule, U.S. production has edged higher as drillers put more rigs to work. Rising tensions with Iran aren’t yet seen threatening a broader nuclear deal that lifted sanctions on the country’s oil exports.
“Geopolitical risk and the oil nations’ production cuts give a floor to prices,” said Giovanni Staunovo, an analyst at UBS Group AG. “Fears of a too strong U.S. supply response and U.S. oil inventories are limiting the upside at present. The next trigger for prices will come from the production cuts leading to inventory draw-downs.”
West Texas Intermediate for March delivery was at $53.96 a barrel on the New York Mercantile Exchange, up 13 cents, at 8:57 a.m. in London. Total volume traded was about 41 percent below the 100-day average. The contract gained 29 cents, or 0.5 percent, to $53.83 on Friday.
Brent for April settlement climbed 9 cents, or 0.2 percent, to $56.90 a barrel on the London-based ICE Futures Europe exchange. Prices advanced 2.3 percent last week. The global benchmark crude traded at a premium of $2.31 to April WTI.
Iran carried out further missile tests during an annual military exercise on Saturday, a day after President Trump imposed fresh sanctions on a raft of individuals and companies in response to the country test-firing a ballistic rocket. While the missile tests didn’t contravene the nuclear accord signed in 2015, they are seen by some nations as going against a UN Security Council resolution that enshrines the agreement.
- OPEC is scheduled to release its monthly report Feb. 13, which will include January figures, the first month of supply cuts.
- Iran’s oil production capacity will reach 4 million barrels a day in March, Iranian Students News Agency reported Saturday, citing Ali Kardor, the managing director of state-run National Iranian Oil Co.
- As investors are kept on tenterhooks over U.S. policies and whether OPEC and other nations will curb output as pledged, Brent crude may oscillate between $52 and $62 a barrel, according to Kho Hui Meng, the head of the Asian arm of Vitol Group.
- Iraq’s exports decreased by 187,000 barrels a day to 3.323 million barrels a day in January from the previous month, according to a person familiar with the matter, who asked not to be identified because the data isn’t public.