Oil bounces back, but markets remain fragile amid trade disputes

SINGAPORE (Reuters) – Oil prices jumped more than 1% on Friday amid OPEC supply cuts and Middle East tensions, but still did not fully recoup losses earlier in the week on economic slowdown jitters and swelling inventories – their steepest drops since the start of the year.

FILE PHOTO: An oil pump jack pumps oil in a field near Calgary, Alberta, Canada, July 21, 2014. REUTERS/Todd Korol/File Photo

Brent crude futures, the international benchmark for oil prices, were at $68.50 per barrel at 0231 GMT, up 74 cents, or 1.1%, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were up 63 cents, or 1.1%, at $58.54 per barrel.

“Multiple supply risks remain, as tension continues between Iran and the U.S., which could turn disruptive,” ANZ bank said on Friday.

The Organization of the Petroleum Exporting Countries (OPEC) has led supply cuts since the start of the year aimed at tightening the market and propping up prices.

ANZ said U.S. sanctions on Iran’s and Venezuela’s oil industries would likely further reduce crude exports from OPEC, of which both countries are members.

But Friday’s firmer prices could not make up the much bigger slumps from earlier in the week, which have put crude futures on track for their biggest weekly losses this year.

From mid-week, rising oil inventories in the United States started weighing on prices.

“Increasing (oil) inventories and slumping U.S. manufacturing activity exacerbated trade related concerns about global demand,” Michael McCarthy, chief market strategist at CMC Markets in Australia, said in a note, pulling WTI below $60 per

Keep reading this article on Reuters Business.

Leave a Reply