Crude oil futures rose Friday, with U.S. West Texas Intermediate up more than 9% for the week and Brent crude gaining 5%, Kallanish Energy reports.
The increases were due to fears the U.S. could attack Iran and disrupt crude flows from the Middle East, which provides more than 20% of the world’s oil output.
U.S. gasoline futures, meanwhile, jumped following a massive fire at Philadelphia Energy Solutions’ refinery in Philadelphia, the largest on the U.S. East Coast. (See story elsewhere in this issue.)
While the rise in U.S.-Iranian tensions has largely driven crude price gains, analysts said an early July meeting of members of Opec+ (including Opec and non-Opec producers) to reassess production targets, a potential softening of trade tensions between the U.S. and China and the refinery fire were also supporting prices.
Brent futures were up 69 cents, or 1.1%, to $65.14 a barrel, while West Texas Intermediate (WTI) crude settled up 0.6%, at $57.43/Bbl.
That put Brent on track to gain roughly 5% for the week, its first weekly gain in five weeks, and WTI to jump more than 9%, its biggest weekly percentage gain in 2-1/2 years.
WTI jumped 5.4% and Brent rose 4.3% Thursday after Iran shot down a drone the U.S. claimed was in international airspace and Iran said was over its territory.
Trump said he aborted a military strike on Iran because such a response to Tehran’s downing of the unmanned U.S. surveillance drone would have caused a disproportionate loss of life.
Tensions have been on the rise since U.S. sanctions on Iran severely reduced oil exports from Opec’s third largest producer and as Washington has blamed Tehran, which denies any role, for a series of attacks on oil tankers in the Gulf.
The demand outlook has also improved, while a weaker dollar also supported oil prices, making crude, usually priced in dollars, cheaper for buyers with other currencies.
Another macroeconomic factor supporting prices is the plan by Beijing and Washington to resume talks to resolve a trade war that has hit economic growth prospects.
This post appeared first on Kallanish Energy News.