TOKYO: Oil is poised for a weekly gain as investors weigh potential supply losses from Iran against ongoing concerns over a trade spat between the world’s two biggest economies.
Futures in New York increased as much as 0.5 percent, on course for a weekly gain of 1.6 percent. The International Energy Agency warned prices could rise further unless other producers offset falling output in Iran and Venezuela. That came after U.S. government data showed slowing oil production growth and shrinking inventories.
Meanwhile, President Donald Trump tweeted that he is “under no pressure” to make a deal with China, tempering optimism over another round of potential talks between the two countries.
Oil has risen about 6 percent from the lows of August as the threat of U.S. sanctions forced buyers of Iranian crude to shun imports from the Persian Gulf nation.
Concerns over the U.S.-China trade tensions and a rout in emerging countries also weighed on sentiment in wider financial markets.
Traders are also looking for clarity on whether the Organization of Petroleum Exporting Countries and allied producers will boost output to fill in the gap as they await the group’s meeting in Algeria next week.
“While oil prices are higher this week, volatility will stay despite the obvious supply drop among some OPEC members such as Iran, as the trade conflict between the world’s two biggest economies is still in play,” Kim Kwangrae, a commodities analyst at Samsung Futures Inc., said by phone from Seoul.
“In the meantime, traders have their hopes up that firmer details on production from OPEC and its allies will come out of the meeting among global producers.”
West Texas Intermediate futures for October delivery rose as much as 32 cents to $68.91 a barrel on the New York Mercantile Exchange and traded at $68.87 at 9:27 a.m. in Singapore. The contract has climbed $1.12 this week. Total volume traded was about 62 percent below the 100-day average.
Brent for November settlement was 22 cents higher at $78.40 a barrel on the ICE Futures Europe exchange after sliding $1.56, or 2 percent, to $78.18 a barrel on Thursday. The contract is up 2 percent this week. The global benchmark was at a $9.72 premium to WTI for the same month. - Bloomberg