Oil headed for a weekly gain as Iran called for the U.S. to comply with commitments it made under a 2015 nuclear deal that lifted punishing sanctions on OPEC’s third-largest producer. Futures in New York were little changed on Friday, set for a 0.4 percent advance this week. Iranian Foreign Minister Mohammad Javad Zarif accused the U.S. of “bullying” businesses into putting off investments in the Middle East nation, days before American President Donald Trump decides whether to pull out from the accord. A withdrawal would reintroduce sanctions on the Islamic Republic, which could curb its crude exports.
Oil increases in recent weeks have been driven by speculation over the fate of the nuclear deal, as well as rising geopolitical tensions in other parts of the Middle East. Crude’s also been helped by the Organization of Petroleum Exporting Countries and its allies including Russia persisting with output curbs to clear a global glut. All that has meant prices are up more than 10 percent this year even though U.S. production is booming.
Yuan-denominated futures for September delivery were little changed at 447.1 yuan per barrel in afternoon trading on the Shanghai International Energy Exchange. The contract is headed for a 0.6 percent increase this week. Iran intensified its criticism of Trump ahead of a May 12 deadline he’s set for making a decision on the accord, stating that there’s “only one way forward and it’s U.S. compliance, not appeasement.” Citing the Islamic Republic’s missile program and its role in Middle East conflicts, the U.S. president has ridiculed the nuclear agreement reached under his predecessor as “flawed” and a “disaster.”
Meanwhile, the Trump administration’s economic team led by Treasury Secretary Steve Mnuchin was having a “very good conversation” with China in Beijing as they entered a second day of negotiations over the two countries’ trade relationship. The Asian nation had said earlier it’s not willing to back down on key issues or submit to any U.S. threats. If there’s “an announcement of an agreement, then it will be positive for prices,” CMC’s McCarthy said. “If the U.S. envoy leaves China without anything solid, then the market may start fretting.”
Sources and photo-credits: Bloomberg