Brent crude futures fell 25 cents to settle at $74.29 a barrel, but notched a 1.8 percent weekly increase, its first increase in four weeks. U.S. West Texas Intermediate (WTI) crude futures fell 92 cents to settle at $68.69 a barrel, and marked a fourth week of declines, falling about 2.4 percent. Depressing oil prices, U.S. stock markets broadly fell on Friday.
BEIJING: Oil prices inched up on Friday, with investors trying to gauge the potential impact on supply from looming U.S. sanctions on Iran's crude exports.
The most-active Brent crude futures contract, for December, had risen 18 cents, or 0.22 percent, to $81.56 per barrel by 0126 GMT. That was close to a four-year high of $82.55 struck on Tuesday.
With the expiration of the Brent November futures contract
U.S futures were up 21 cents, or 0.29 percent, at $72.33 per barrel, on track for a weekly gain.
"The market has been focusing on trading headlines on the Iran sanctions for a whole week. But views on how much OPEC and Russia can make up for the losses vary," said Chen Kai, head of commodity research at Shenda Futures.
The sanctions kick in on Nov. 4, with Washington asking buyers of Iranian oil to cut imports to zero to force Tehran to negotiate a new nuclear agreement and to curb its influence in the Middle East.
Saudi Arabia is expected to quietly add extra oil to the market over the next couple of months to offset the drop in Iranian production, but is worried it might need to limit output next year to balance global supply and demand as the United States pumps more crude. [nL8N1WD5K3]
Two sources familiar with OPEC policy said Saudi Arabia and other producers discussed a possible production increase of about 500,000 barrels per day (bpd) among the Organization of the Petroleum Exporting Countries and non-OPEC allies.
However, ANZ said in a note on Friday that major suppliers were unlikely to offset losses due to the sanctions estimated at 1.5 million bpd.
At its 2018-peak in May, Iran exported 2.71 million bpd,nearly 3 percent of daily global crude consumption. The nation is OPEC's third-largest producer. [nL4N1WC3Q9]
Meanwhile, looming supply from the United States and stable output from Libya were dragging on oil prices, said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA in Singapore. - Reuters
Earlier report:
Oil price rises as investors fret over Iranian supply gaps
NEW YORK: Oil edged higher on Thursday, driven by the prospect of a shortfall in global supply once U.S. sanctions against major crude exporter Iran come into force in five weeks.
U.S. President Donald Trump this week demanded that the Organization of the Petroleum Exporting Countries raise production to prevent further price rises ahead of midterm elections in November for U.S. Congress members.
"The market continues to move higher on fears that the loss of Iranian exports is not going to be made up," said Gene McGillian, director of market research at Tradition Energy, in Stamford Connecticut.
Analysts said that OPEC and Russia appear unlikely to immediately boost production as Trump has demanded. U.S Energy Secretary Rick Perry has ruled out using U.S. strategic crude reserves to lower oil prices.
The most-active December Brent crude futures contract
The front-month November contract expires on Friday.
U.S futures
"On paper, you could argue that the technical and fundamental perspective points to higher prices, so I think that will carry on into next week and further out," Saxo Bank senior manager Ole Hansen said.
Yet Hansen said he was "struggling to see" the price reaching $100 a barrel.
"Already at $80, we are seeing emerging-market local oil prices pretty close to where we peaked a few years ago ... the race to protect consumers from further price rises from here could potentially impact demand growth sooner than would otherwise have been expected," Hansen said.
But Japanese bank Mitsubishi UFJ Financial Group said in a note to clients that market risks "are heavily skewed to the upside and whilst we are not explicitly forecasting Brent to rise to $100 per barrel, we see material risks of this coming to fruition."
Estimates vary widely on how much Iranian crude U.S. sanctions could remove from the market, from 500,000 barrels per day (bpd) to 2 million bpd.
At its 2018 peak in May, Iran exported 2.71 million bpd, nearly 3 percent of daily global crude consumption.
Saudi Arabia will quietly add extra oil to the market in coming months to offset a drop in Iranian production but is worried it might need to limit output next year as the United States pumps more crude.
OPEC has little spare capacity. Iran is the group's third-largest producer. - Reuters
Earlier report:
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