Berita 24 English - Oil prices rose 2% on Friday following three days of declines, boosted by the formation of a storm in the Gulf of Mexic...
Berita 24 English - Oil prices rose 2% on Friday following three days of declines, boosted by the formation of a storm in the Gulf of Mexico. Still, they were on track for a weekly decline as investors braced for the return of Iranian crude supplies following officials' announcement that Iran and world powers made progress toward a nuclear deal.
Brent crude futures settled up $1.33, or 2%, to $66.44 per barrel, while US West Texas Intermediate was up $1.64, or 2.65 per cent, to $63.54 per barrel.
The National Hurricane Center (NHC) in the United States said on Friday that a weather system forming over the western Gulf of Mexico has a 40% chance of developing into a cyclone in the next 48 hours.
"This early storm prompted traders to buy crude ahead of the weekend in anticipation of possible production shutdowns," said Phil Flynn, senior analyst at Chicago-based Price Futures Group.
Gains were limited by the expectation that Iran would increase oil production by a million or more barrels per day later this summer.
The two contracts fell nearly 3% on the week after Iran's president, Hassan Rouhani, said the US was prepared to lift sanctions on his country's oil, banking, and shipping sectors.
For the fourth week in a row, US energy companies added oil and natural gas rigs, as higher oil prices prompted some drillers to return to the good pad.
The oil and gas rig count, a leading indicator of future output, increased by two to 455 in the week ended May 21, the highest level since April 2020. The energy services company Baker Hughes Co reported on Friday.
Iran and world powers have been in talks since April about reviving the 2015 deal, and the European Union official leading the talks expressed confidence on Wednesday that a deal would be reached.
Nonetheless, investors remain optimistic about this summer's fuel demand recovery, as vaccination programs in Europe and the United States would allow more people to travel. However, rising cases in parts of Asia raise concerns.
Option bets on oil prices rising above $100 for the December 2021 Brent contract have increased significantly in the aftermath of last week's unexpectedly strong US inflation data, with open interest on calls nearly tripling in May, according to JPMorgan analysts. Brent is expected to end 2021 at $74, according to the bank.
To reach $100, demand would need to average above 102.6 million barrels per day in the third quarter and grow to 103.6 million barrels per day in the fourth quarter, JPMorgan said. Iran's crude and condensate production is expected to increase to 3.2 million barrels per day in December, up from approximately 2.8 million barrels per day in the first quarter.
Barclays forecasts Brent and West Texas Intermediate oil prices to average $66 and $62 per barrel, respectively, this year. It lowered demand estimates for Emerging Markets Asia (ex-China), indicating the possibility of further declines if the recent infection surge persisted.
"Extended mobility restrictions in the region may slow demand recovery slightly, but they do not appear likely to stall it for an extended period, given the overwhelmingly positive results of vaccination programs worldwide," the report stated.
Money managers reduced their net long positions in US crude futures and options in the week ended May 18, according to the US Commodity Futures Trading Commission (CFTC).
