Crude posted its largest weekly gain since July as geopolitical tensions threatened to accelerate the tightening of global supplies.
Futures rallied for a fifth day to the highest since 2014 in New York on Friday. The U.S. benchmark crude ended the week up 8.6 percent amid simmering disputes across the Mideast region that’s home to almost half the world’s oil. OPEC’s output has fallen to the lowest in almost three years, propelled in part by the magnitude of Venezuela’s downward spiral.
“We’re continuing to get a bit of a risk premium here from potential issues in the Middle East,” said Bart Melek, head of global commodity strategy at TD Securities in Toronto. “There’s a general consensus out there that this market is rebalancing.”
Oil in both New York and London jumped this week as missiles flew on the Saudi peninsula and U.S. President Donald Trump threatened punishment for a chemical attack on civilians in Syria. At the same time, OPEC is probably on the verge of erasing a worldwide crude glut, the International Energy Agency said on Friday.
“The tensions around what the U.S. response to Syria is going to be” are elevating risks, said Ashley Petersen, lead oil analyst at Stratas Advisors LLC in New York. “It really does have the ability to escalate quickly.”
West Texas Intermediate for May delivery advanced 32 cents to settle at $67.39 a barrel on the New York Mercantile Exchange. Total volume traded was about 14 percent above the 100-day average.
Brent for June settlement climbed 56 cents to end the session at $72.58 on the London-based ICE Futures Europe exchange, the highest since November 2014. The global benchmark crude traded at a $5.25 premium to June WTI.
Yuan-denominated futures for September delivery gained 0.4 percent to 426.1 yuan per barrel on the Shanghai International Energy Exchange on Friday.
Less than 10 percent of the oil-inventories surplus remains after OPEC and its partners curbed production by even more than they intended while world demand climbed, the International Energy Administration said on Friday.
Other oil-market news:
Gasoline futures rose 0.5 percent to settle at $2.0654 a gallon. Hedge funds boosted net-bullish Brent crude oil bets to a record, weekly ICE Futures Europe data on futures and options showed. The U.S. oil rig count rose by seven to 815, the highest since March 2015, according to Baker Hughes data. Saudi Arabia has overhauled the royalty system that taxes oil giant Aramco, creating a new levy on revenue with a marginal rate of 50 percent when crude rises above $100 a barrel, according to financial information seen by Bloomberg News.