Crude Oil Prices Settle Flat But Remain On-Track for Weekly Gain

Investing.com – WTI crude oil prices settled lower on Thursday but remained on track for a weekly gain amid expectations U.S. sanctions on Iran would cut global crude supplies, extending a rally in oil prices.

On the New York Mercantile Exchange for June delivery settle unchanged at $71.49 a barrel, while on London’s Intercontinental Exchange, rose 9 cents to trade at $79.36 a barrel. Brent rose above $80 a barrel earlier in the session for the first time since November 2014.

Ahead of the re-imposition of U.S. sanctions on Iran – expected to take place in two separate waves – on Aug 6. and Nov. 5, market participants continued to expect the sanctions would cut Iran’s oil exports enough to suppress global crude supplies despite a lack of support from the EU and China.

The European Commission reportedly is working on a law that bans European companies and courts from complying with U.S. sanctions against Iran, Reuters said.

The reluctance from the United States’ main trading allies has spark debate on whether the sanctions would be effective enough to disrupt global oil supplies as OPEC recently said it was willing to step in and plug the potential gap in supply to keep oil markets stable.

Yet, some analysts have suggested the sanctions on Iranian oil customers would likely have an immediate impact of less than 200,000 barrels per day, and block less than 500,000 barrels after six months.

On the domestic front, oil prices were also supported by bullish U.S. crude inventory data showing both crude and gasoline supplies fell more than expected last week, according to the Energy Information Administration (EIA) on Wednesday.

Inventories of U.S. crude fell by barrels for the week ended May 11, beating expectations for a draw of just 0.763 million barrels, while gasoline inventories fell by barrels, beating expectations for a fall of 1.421 million barrels.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.