Oil prices climb as Middle East tensions simmer

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Reuters

KEY POINTS
  • Brent futures were up 25 cents, or 0.4%, at $65.45 a barrel by 0325 GMT.
  • West Texas Intermediate crude was up 37 cents, or 0.6%, at $57.80 a barrel.
Reusable: Oil pump jack leased by Devon Energy 150922
A pump jack operates at a well site leased by Devon Energy Production Co. near Guthrie, Oklahoma.
Nick Oxford | Reuters

Oil prices climbed on Monday as tensions remain high between Iran and the United States, with U.S. Secretary of State Mike Pompeo saying “significant” sanctions on Tehran would be announced.

Brent futures were up 25 cents, or 0.4%, at $65.45 a barrel by 0325 GMT.

West Texas Intermediate crude was up 37 cents, or 0.6%, at $57.80 a barrel.

U.S. President Donald Trump said last week that he called off a military strike to retaliate for Iran’s downing of an unmanned U.S. drone, and he said on Sunday that he was not seeking war with Iran.

But Pompeo also said “significant” sanctions on Iran would be announced on Monday aimed at further choking off resources that Tehran uses to fund its activities in the region.

“The Middle East clashes should support oil prices at the start of the week as crude markets will wait to see Iran’s response to the threat of additional sanctions, ” said Edward Moya, senior market analyst at OANDA in New York.

Oil prices surged last week after Iran shot down a drone that the United States claimed was in international airspace and Tehran said was over its territory.

Amid the escalating tensions, Brent racked up a gain of about 5% last week, its first weekly gain in five weeks, and WTI jumped about 10%, its biggest weekly percentage gain since December 2016.

Trump said he had aborted a military strike on Iran because such a response to Tehran’s downing of the unmanned U.S. surveillance drone would have caused a disproportionate loss of life.

Iranian officials told Reuters that Tehran had received a message from Trump through Oman overnight warning that a U.S. attack on Iran was imminent.

“We’re prepared to negotiate with no preconditions,” Pompeo told reporters on Sunday. “They know precisely how to find us. I am confident that at the very moment they’re ready to truly engage with us we’ll be able to begin these conversations. I’m looking forward to that day.”

Meanwhile, U.S. energy companies last week increased the number of oil rigs operating for the first time in three weeks.

Companies added one oil rig in the week to June 21, bringing the total count to 789, Baker Hughes said in a closely followed report on Friday.

Oil falls after US softens stance on Iranian sanction waivers

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  • Oil prices fell on Wednesday, with Brent dropping by more than $1, after the United States said it would consider requests for waivers from sanctions due to snap back into place on Iranian crude exports.

A pump jack operates at a well site leased by Devon Energy Production Co. near Guthrie, Oklahoma.

Nick Oxford | Reuters
A pump jack operates at a well site leased by Devon Energy Production Co. near Guthrie, Oklahoma.

Oil prices fell on Wednesday, with Brent dropping by more than $1, after the United States said it would consider requests for waivers from sanctions due to snap back into place on Iranian crude exports.

Brent crude futures were down $1.10, or 1.4 percent, at $77.76 a barrel by 0112 GMT. U.S. crude was down 68 cents, or 0.9 percent, at $73.43.

Both contracts had posted gains earlier in the previous session after industry data showed inventories fell more than expected last week in the United States.

Washington will consider requests from some countries to be exempted from sanctions it will put into effect in November to prevent Iran from exporting oil, U.S. Secretary of State Mike Pompeo said on Tuesday.

“There will be a handful of countries that come to the United States and ask for relief from that. We’ll consider it,” Pompeo said, according to the text of an interview in Abu Dhabi with Sky News Arabia released by the U.S. State Department. He did not identify any countries.

Washington had earlier told countries they must halt all imports of Iranian oil from Nov. 4 or face U.S. financial measures, with no exemptions.

The U.S. pulled out of a multinational deal in May to lift sanctions against Iran in return for curbs to its nuclear program.

Later on Tuesday, after arriving in Brussels for a NATO summit, Pompeo stressed the need to keep up pressure on Iran in coordination with allies. He also planned to reassure allies about alternative oil supplies.

Oil's holding steady above $70, and one trader says there's more room to run

Oil’s holding steady above $70, and one trader says there’s more room to run  

Efforts by the Organization of the Petroleum Exporting Countries (OPEC) and other producers have led to a tighter oil market after a persistent glut.

With the impending sanctions on OPEC member Iran and supply disruptions from Canada to Libya, prices have risen and sparked fears of shortages, amid rising demand.

U.S. crude inventories fell last week by 6.8 million barrels, according to data from industry group, the American Petroleum Institute.

That decline was larger than expected, causing crude futures to gain in post-settlement trading.

Analysts polled by Reuters forecast that crude stocks fell on average by 4.5 million barrels, ahead of government data at 10:30 a.m. EDT (1430 GMT) on Wednesday.