More pressures this week on global oil prices with the International Energy Agency (IEA) and the Organisation of the Petroleum Exporting Countries (OPEC) to publish their latest monthly assessment of oil markets.
Given that the US and Saudi Arabia are still producing as much oil as possible and ignoring calls to cut output, with US inventories at record levels, the two reports are not likely to be positive for the oil bulls who still believe there’s a big price rebound just waiting to happen.
Crude-oil futures saw a week of wild price swings with a jump on Friday, as the US benchmark West Texas Intermediate (WTI) type of crude enjoyed a fourth consecutive weekly gain, as fears a deal with Iran could result in a near-term flood of crude exports continued to fade.
Oil futures briefly (on Friday night, our time) reached session highs after oil-services firm Baker Hughes reported another weekly drop in the number of US oil rigs.
In New York, WTI sweet crude futures for delivery in May rose 85c, or 1.7%, to close at $US51.64 a barrel.
That was a rise over the week of 5.1%, and was after the 6% slide on Wednesday thanks to another sharp increase in weekly US inventories.
In London May Brent crude rose $US1.30, or 2.3%, to close at $US57.87 a barrel, for a weekly gain of 5.3%.
“Even if a final deal is reached, Iran is unlikely to be able to significantly ramp up its exports until 2015 at the earliest,” economists at Capital Economics wrote in a note downplaying the importance of the deal with Iran.
Some analysts say a completed nuclear deal with Iran by June could add up to 800,000 barrels a day crude to the oversupplied global market, but it is now clear that won’t happen overnight.
A slower return to the export market by Iran is seen as a positive by traders, but the timing of an agreement could still interfere with a recovery in prices, wrote analysts at KBC Bank in Brussels on Friday night, according to Marketwatch.com.
“The timing is interesting as the increase could come precisely when the low oil prices should start to have a greater impact on the production-growth rate in the U.S.,” they said. “In other words, the anticipated decline in oil production by the U.S. may be (more than) offset by increased exports from Iran. Thus the period of low oil prices may become longer,” the KBC note said.
Baker Hughes said the number of US oil rigs fell by 42 to a total of 760 in the latest week, while total rigs were down 40 to 988.
The number of rigs has fallen sharply in reaction to a more-than-50% plunge in oil prices since mid-2014, but production has continued to edge higher.
The number of oil rigs has fallen by 757 in the past year, according to Baker Hughes.
Gold however battled all week for a solid gain.
Comex futures in New York rose on Friday, but still ended the week lower as the US dollar advanced on Friday.
Gold for June delivery on Comex rose $US11, or 0.9%, to settle at $US1,204.60 an ounce for a weekly gain of just 0.3%.
Comex May silver rose 21c, or 1.3%, to $US16.38 an ounce, down 1.9% over the week.
Comex May copper was unchanged at $US2.73 a pound.
