Crude Oil Prices Settle Lower as Rig Counts Jump for Sixth-Straight Week

Investing.com – Crude oil prices settled lower on Friday but posted a weekly gain as sentiment remained positive despite signs of an increase in U.S. production as rig counts jumped for the sixth week in a row.

On the New York Mercantile Exchange for June delivery fell 66 cents to settle at $70.70 a barrel, while on London’s Intercontinental Exchange, fell 0.54% to trade at $77.05 a barrel.

The number of oil rigs operating in the US rose by 10 to 844, its highest level since March 20, 2015, according to data from energy services firm Baker Hughes.

The uptick in rig counts raised expectations for a further ramp in U.S. output following data earlier this week showing domestic output climbed by 84,000 barrels per day to 10.7 million barrels per day.

Yet, sentiment on oil prices remained mostly positive as the United States’ decision to pull out of the Iranian nuclear deal on Tuesday, prompted traders to raise their bets on a fall in global crude supplies.

U.S. sanctions against Iranian crude oil customers are expected to commence on Nov. 5. But some countries could be granted relief on sanctions should they make significant cuts to their imports of Iranian oil over the next six months, the Treasury Department said earlier this week.

A six-month loss of 250,000 barrels of oil per day of Iran supply could support oil prices by $6.50 per barrel if other OPEC members do not respond to offset it, Goldman Sachs said earlier this week.

Iran-Israel tensions grew in the wake of the United States’ decision as the duo exchanged missiles earlier this week, adding a further premium to oil prices.

“This backdrop of increasingly high tensions in the Middle East are even more supportive as US oil inventory shows big drops in supply against robust and near record-breaking demand,” Price Futures Group analyst Phil Flynn said on Thursday.

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