Oil prices were little changed on Friday after rising earlier, as market jitters kicked in over the prospect of geopolitical risks from possible new US sanctions against Iran.
US West Texas Intermediate crude futures were trading 15 cents lower at $68.28 per barrel. WTI is set for gain of 0.3% for the week, CNBC reported.
Brent crude oil futures were at $73.37 per barrel, down 25 cents, or 0.3%, from their last close after touching an intraday high of $73.80 per barrel in early morning trading. Brent futures for July delivery are set for a weekly drop of 0.5%. Technical analysis from Reuters’ Wang Tao showed the market may retest a price support level at $72.39 per barrel after peaking around a resistance at $75.45.
Iran’s Foreign Minister Mohammad Javad Zarif said on Thursday US demands to change its 2015 nuclear agreement with world powers were unacceptable, as a deadline set by US President Donald Trump for Europeans to “fix” the deal loomed.
“Current prices reflect a premium for Iran uncertainties. Investors are worried about supplies after Iran took a tough stance in its response to the United States,” Wang Xiao, the head of Guotai Junan Futures for crude futures said, adding prices may fall if expectations for new sanctions ease.
European powers still want to hand Trump a plan to save the Iran nuclear deal next week. But they have also started work on protecting European Union-Iranian business ties if the US president makes good on a threat to withdraw, six sources told Reuters.
Markets will remain skittish as the May 12 deadline to rectify the deal approaches, ANZ Research said in note.
Iran resumed its role as a major oil exporter in January 2016 when international sanctions against Tehran were lifted in return for curbs on Iran’s nuclear program. Aside from security concerns, growing US crude supplies are capping price gains.
WTI crude for delivery in Midland slid for a fourth day on Thursday to hit its lowest in more than three-and-a-half years. WTI at Midland traded as much as $14 a barrel below benchmark futures.
Surging production in the Permian Basin has continued to outpace pipeline capacity, while local refining issues have exacerbated oversupply in the region, dealers told Reuters.
Multi-year low spot market prices followed US government data that showed a 6.2-million-barrel jump in crude inventories last week.
The United States now produces more crude oil than top exporter Saudi Arabia.
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