Crude Oil Prices Settle Higher to Snap 7-Week Losing Streak

Investing.com – WTI crude oil prices settled higher Friday, as signs of falling Iranian output and tightening domestic output lifted sentiment.

On the New York Mercantile Exchange for October delivery gained 1.3% to settle at $38.72 a barrel, while on London’s Intercontinental Exchange, rose 1.34% to trade at $75.74 a barrel.

Oilfield services firm Baker Hughes reported on Friday that the number of U.S. oil drilling rigs in operation fell by 9 to 860.

The drop in rig counts, pointing to signs of tighter output, comes against data, released earlier this week, showing U.S. output rose for second-straight week to 11.0 million barrels a day.

“The data is likely seen to be as slightly positive for WTI oil prices as the oil rig count trend was down considerably after being flat the week before, which may signal that activity levels are finally slowing into the fourth quarter of the year,” National Alliance said.

The upbeat day for oil prices comes even as a meeting between the U.S.-China failed to deliver any material progress. China’s economy has been pressured by tariffs, stoking fears that the world’s biggest oil consumer appetite for oil may start to wane, which would stifle oil prices.

Also helping sentiment on oil were signs of falling Iranian crude output ahead of U.S. sanctions on the Islamic Republic’s crude exports, expected to take effect in November.

Jefferies, citing third-party reports, said Iranian tanker loadings are already down by around 700,000 barrels a day in the first half of August from the prior month.

Analysts have said the loss of Iranian crude from the market could rise to as much as 1 million barrels per day.

The first weekly rise in for U.S. oil prices in eight weeks was also supported by a 3% gain on Wednesday after domestic supplies fell more than expected.

Inventories of U.S. crude fell by 5.836 million barrels for the week ended Aug. 17, confounding expectations for of 1.497 million barrels, according to data, released Wednesday, from the Energy Information Administration (EIA).

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