Oil traded above $69 a barrel as investors prioritize the loss of supplies in key OPEC nations against the threat to demand in emerging markets.
Futures gained 0.8 percent in New York, extending Friday’s 0.6 percent increase. Supply concerns from losses in Venezuela and Iran are eclipsing the drag on demand from economic turbulence in emerging markets, according to Bank of America Corp. Russian Energy Minister Alexander Novak and his Saudi Arabian counterpart Khalid al-Falih met in Moscow Saturday to confirm their willingness to stabilize prices and react to any changes in the market.
Crude has mostly stayed below $70 a barrel since mid-July as a trade dispute between the U.S. and China threatens global economic growth. Still, prices have increased almost 7 percent from last month’s lows as speculation swirls over whether a potential supply gap can be filled as American sanctions curb Iran’s oil exports and Venezuela’s unraveling economy hits its energy infrastructure.
“For now, supply issues are a much bigger problem,” said Francisco Blanch, head of commodities research at Bank of America in New York.
West Texas Intermediate for October delivery was at $69.53 a barrel on the New York Mercantile Exchange, up 54 cents, at 10:59 a.m. in London. The contract climbed $1.24 last week. Total volume traded was about 31 percent below the 100-day average.
Brent for November settlement traded at $78.64 a barrel on the ICE Futures Europe exchange, up 55 cents, after rising $1.26 last week. The global benchmark crude traded at a $9.34 premium to WTI for the same month.
“The U.S.-China trade tension restricts oil from rising further, while optimism over Saudi and Russia making up for Iran’s losses is keeping prices from falling lower,” Ahn Yea Ha, a commodities analyst at Kiwoom Securities Co., said by phone from Seoul. “It’s important for OPEC and its allies to make sure prices don’t drop excessively,” and the market is expecting reassurance when the group’s ministers meet this weekend in Algiers.
Some other key oil-market figures, news and events:
Shale explorers last week added the most oil rigs in a month as a pipeline bottleneck in the busy U.S. Permian Basin is encouraging drilling in other areas, according to data released Friday by oilfield-services provider Baker Hughes. While money managers pile up on bets that Brent futures will rise as supplies from Iran shrink, even Hurricane Florence wasn’t enough to get investors excited about WTI prices in New York. Companies, regulators and environmental groups are waiting for record floods to recede so they can make a comprehensive assessment of damage from Hurricane Florence. Abu Dhabi is pushing ahead with an initial public offering for Spanish oil company Cia Espanola de Petroleos SAU, in what could be the largest such deal in a decade.
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