Oil at over 3-year high
new york — Oil prices rose about 2 per cent on Friday, with US crude hitting its highest in more than three years, as global supplies remained tight and the market awaited news from Washington on possible new US sanctions against Iran.
Bob Yawger, director at Mizuho, noted the looming May 12 deadline that US President Donald Trump had set for Europeans to “fix” the deal with Iran over its nuclear programme or he would refuse to extend US sanctions relief for the oil-producing nation.
“You have the May 12 Iran and Trump headlines that support the market,” he said.
US light crude settled up $1.29 at $69.72 a barrel. It touched a session peak of $69.97 for the first time since November 2014. It was on track to gain just over 2.3 per cent on the week.
Brent crude oil settled up $1.25 at $74.87 a barrel. The global benchmark was set to end the week up 0.3 per cent.
Iran’s foreign minister said on Thursday that US demands to change its 2015 agreement with world powers were unacceptable. Trump has said European allies must rectify “terrible flaws” in the international accord by May 12. European powers want to hand Trump a plan to save the Iran nuclear deal next week. But they have also started work on protecting EU-Iranian business ties if Trump makes good on his threat to withdraw.
Iran resumed its role as a major oil exporter in January 2016 when international sanctions were lifted in return for curbs on Tehran’s nuclear programme.
ANZ analysts Daniel Hynes and Soni Kumari said Brent could reach $80 a barrel by the end of this year, attributing recent strength to rising geopolitical risks and tighter global supply.
“We expect the market to tighten even further in second half 2018,” they wrote in a note to clients. —