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Oil prices turned higher Friday. consolidating recent action and headed for a weekly gain. as global supplies remain tight and the market looks for possible new sanctions against Iran.
Earlier. a stronger dollar was credited with driving down the U.S.-based crude contract.
At last check. June West Texas Intermediate crude oil rose 27 cents. or 0.8%. to $68.70 a barrel on the New York Mercantile Exchange. The contract is headed for a nearly 0.7% weekly gain. according to FactSet data. International benchmark July Brent meanwhile. added 29 cents. or 0.4%. to $73.92 a barrel on ICE Futures Europe.
“Oil prices are practically flat on Friday… after both benchmarks posted solid gains yesterday. buoyed by a tumble lower in the dollar. as well as continued speculation that the U.S. will impose fresh sanctions on Iran.“ said Christina Parthenidou. investment analyst at brokerage XM.
Dollar-denominated commodities like oil tend to have an inverse relationship with the dollar.
The ICE U.S. Dollar Index rose 0.2% to 92.566. trading around its highest level since early January. The index was on track for a 1.1% weekly gain. which would mark a third straight week of advances.
Giovanni Staunovo. commodities analyst at UBS Wealth Management. said the oil market was mainly awaiting a decision from President Donald Trump on whether the U.S. will pull out of a 2015 international agreement to curb Iran’s nuclear program by a self-imposed May 12 deadline.
Prices have been bolstered in recent weeks on growing expectations Trump will abandon the deal. triggering a reimposition of economic sanctions on Iran that would hinder its oil output and reduce global supply. Brent climbed to more than three-year highs. breaching the symbolic $75-a-barrel threshold. on such expectations.
Iran’s foreign minister said on Thursday U.S. demands were unacceptable. European interests want to hand Trump a plan to save the Iran nuclear deal next week. But they have also started work on protecting E.U.-Iranian business ties if the U.S. president makes good on a threat to withdraw. Reuters reported.
“This will be the main issue preoccupying the oil market. with fundamental factors such as stock levels and production data taking a back seat until this has been resolved.“ according to analysts at Commerzbank.
Oil-market participants are looking ahead to weekly data Friday afternoon from Baker Hughes on the number of rigs drilling for oil in the U.S.. a proxy for activity in the sector.
Among the energy products on Nymex Thursday. June gasoline rose 0.5% to $2.0983 a gallon. while June heating oil advanced by 0.9% to $2.1317 a gallon.
