Global oil futures finished lower on Friday, as news reports tied to Iran sanctions, a cease-fire between Saudi Arabia and Yemen, and President Trump considering limits on investor portfolio flows into China, pressured prices, contributing to a loss of nearly 4% for the week.
Oil prices had been trading lower as The Wall Street Journal reported Friday that Saudi Arabia was introducing a partial cease-fire in Yemen. If true that would be a stunning turnaround in two weeks.
It was only a fortnight ago that drone attacks, now said to have come from Iran or using Iranian technology damaged two key oil facilities in Saud Arabia, sparking a surge in global prices that quickly vanished
Friday’s news saw West Texas Intermediate crude for November delivery drop 50 cents, or 0.9%, to settle at $US55.91 a barrel in New York.
For the week, prices for the front-month contract fell 3.8%. November Brent crude lost 83 cents, or 1.3%, to $US61.91 a barrel in Europe, to be down 3.7% for the week.
“While there are reports of thawing of Saudi-Yemen tensions, [a] potential U.S. deal with Iran and potential for more U.S. restrictions on China, all of which support lower oil price, Baker Hughes…announced that the number of active U.S. oil and gas rigs declined to 860, which is lowest since April 2017,” said Manish Raj, chief financial officer at Velandera Energy Partners, told MarketWatch.
Baker Hughes, the oil services group, delivered another gloomy update on drill rig use on Friday. It reported that the number of US rigs actively drilling for oil fell for a sixth straight week, down by six to 713.
The total active US rig count, meanwhile, also fell by eight to 860, according to Baker Hughes.
The total count last week was the lowest since April 2017.
US oil production is running around 12.5 million barrels a day at the moment, according to the US Energy Information Administration, up 13% or 1.4 million barrels in the past year.
