Oil prices rose back above $70 a barrel on Monday, with U.S. crude recording its best one-day dollar gain in over a month, after four weeks of losses for the benchmark.
West Texas Intermediate crude ended Monday’s session up $1.44 a barrel, or 2.1%, to $70.13/Bbl, Kallanish Energy reports. While the contract has risen in seven of the previous 10 sessions, it has not posted a gain of more than $1/Bbl since June 27, CNBC reported.
As of Friday, WTI was down more than 7% over the last four weeks, as heavy losses in a handful of trading sessions wiped out a string of modest daily gains for the benchmark.
The contract to deliver international benchmark Brent crude for September was up 83 cents a barrel, or 1.1%, at $75.12/Bbl by 2:08 p.m. ET. The September contract expires today. Trading was heavier for the October contract, which was up 97 cents, or 1.3%, at $75.73/Bbl.
Prices got support after Saudi Arabia announced it would suspend shipments of oil through the Bab el-Mandeb Strait, after Houthi rebels in Yemen attacked a pair of oil tankers in the Red Sea. Saudi has led a military coalition against the Iran-aligned Houthis for more than three years.
The U.S. and Iran have lately engaged in a war of words, with Iranian officials threatening to snarl oil exports in the world’s busiest region for crude shipments.
Tension is rising ahead of the first of two deadlines next week for international businesses to wind down ties with Iran under renewed U.S. sanctions.
The situation raises concerns that the world will be short of oil. Those concerns have been amplified as Canada’s Suncor Energy works to fully restore operations at its Syncrude oil sands facility in western Canada, where supplies have been disrupted by a power outage earlier this year.
“It’s just this witches’ brew of supportive factors from Iran to the Syncrude,” John Kilduff, founding partner at energy hedge fund Again Capital, told CNBC.
A Reuters survey indicates the 15-member OPEC oil cartel increased output by 70,000 barrels per day in July. That would mark a slowdown in production growth from June, when the group hiked production by 173,000 Bpd. OPEC is seeking to add supplies to the market to prevent prices from rising too quickly and denting demand.