Oil prices were mixed on Friday. Brent is on track for its third week of gains as investors consider possible consequences of the reimposition of sanctions on Iran by the Trump administration. BP photo.
Oil prices little changed Friday
Oil prices dipped on Friday as analysts and investors weighed concerns about possible supply reductions should the United States reimpose sanctions against Iran.
By 2:40 p.m., EDT, Brent crude was down 15 cents to $73.73/barrel and are on track for their third straight week of gains. US West Texas Intermediate dipped 16 cents to $68.03/barrel. WTI is likely to post a weekly loss of about 0.3 per cent. The Canadian Crude Index fell by 22 cents to $49.53.
On May 12, President Donald Trump will announce his decision on whether to renew Iran sanctions relief. In 2015, the Obama administration along with six other world powers agreed to relax sanctions initially imposed against Tehran in 2006 for failure to suspend its uranium enrichment program.
During the 2016 presidential election, Trump railed against the deal and after taking office, imposed the May 12 deadline on congress and European allies to “fix” the agreement.
Should the US reimpose sanctions, Iranian crude exports could be cut and the global oil supply reduced.
Following a meeting earlier in the week between French President Emmanuel Macron and President Trump, Macron said he believes Trump will leave the agreement “for domestic reasons”. Macron went on the describe the US as “insane” for a number of recent global policy U-turns.
Mark Watkins, a regional investment manager at US Bank Wealth Management told Reuters “That’s an issue that is more political in nature that could have a shock in the market.” He added “It’s one of those wildcards that’s out there because if the sanctions do happen, there’s going to be oil that comes off the market.”
The lower cost of US crude along with increasing US production rising to 10.59 million barrels per day last week, has led to record-high US exports.
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