Oil settles up but off highs as Flynn news spooks Wall Street

NEW YORK: Oil prices settled up slightly, but came off session highs as financial markets reeled from an ABC News report that added to concerns about President Donald Trump’s exposure to a probe into Russian meddling in last year’s campaign.

Brent crude rose as high as US$64.32 a barrel, the day after OPEC and other crude producers agreed to extend output cuts until the end of 2018 to tighten global supplies and support prices.

But oil pared gains as Wall Street stocks slid following an ABC report that former national security adviser Michael Flynn was prepared to tell investigators that prior to taking office, Trump directed him to make contact with Russians.

Reuters has not verified the ABC News report, which cited a Flynn confidant. Flynn also pleaded guilty on Friday to lying to the FBI.

“Oil prices have pared earlier gains in tandem with losses seen in the equity market partly because ( of) news regarding Michael Flynn,” said Abhishek Kumar, Senior Energy Analyst at Interfax Energy’s Global Gas Analytics in London.

Brent futures settled at US$63.73 a barrel, putting the new front month February contract up 16 cents from where January expired on Thursday. The February futures contract was up about 1.8 per cent from where it closed in the previous session.

US West Texas Intermediate crude gained 96 cents, or 1.7 per cent, to settle at US$58.36 per barrel. WTI’s January contract does not expire till December 19.

Both benchmarks declined for the week, with Brent down less than one per cent and US down about one per cent.

Before the Flynn news spooked Wall Street, crude prices were approaching their highest levels since the summer of 2015.

On Thurdsay, the Organization of the Petroleum Exporting Countries and some non-OPEC producers led by Russia agreed to extend the output cuts. — Reuters