Oil set for monthly gain as Iran risks continue to rattle market
Oil prices edge towards $80 a barrel as concern grow whether OPEC producers can replace lost barrels from Iran when US sanctions take effect in November
Seoul: Oil in London is poised for the biggest monthly gain since April on concern over supply disruptions in Iran, keeping its premium buoyed against prices in New York.
Brent crude is up 4.4% this month, while West Texas Intermediate is 1.9% higher, the smallest monthly gain since early 2016. Brent’s premium to WTI has risen as the specter of supply losses from OPEC member Iran continues to haunt the market. Meanwhile, a pipeline crunch and speculation that President Donald Trump will pursue efforts to lower fuel costs have weighed on the U.S. marker.
The global benchmark crude has edged higher toward $80 a barrel this month as concern grew whether other OPEC producers can replace lost barrels from the Persian Gulf state when US sanctions take effect in November. Shrinking American crude inventories, coupled with optimism over the North American Free Trade Agreement overhaul, have helped oil regain some of its earlier losses as tit-for-tat tariffs between the US and China continue to threaten global economic growth.
Brent futures for October delivery, which expire Friday, were at $77.63 a barrel on the London-based ICE Futures Europe exchange, down 14 cents, at 10:29 a.m. in Seoul. The more-active November contract slipped 0.2% to $77.85. The global benchmark crude traded at a $7.47 premium to WTI, after closing at $7.63 on Wednesday, the widest gap since June.
WTI for October delivery traded at $70.19 a barrel on the New York Mercantile Exchange, down 6 cents. The contract is rebounding this month after a 7.3% drop in July. Total volume traded was about 58 percent below the 100-day average.
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