oil

Oil holds advance as recovery in Iran crude exports seen delayed

Oil held gains after a fourth weekly increase as skepticism among U.S. lawmakers over a nuclear deal with Iran signaled a recovery in the OPEC producer’s crude exports may be delayed.

Futures were little changed in New York after rising 5.1 percent last week. President Barack Obama is dispatching three cabinet members to brief lawmakers as a Senate committee prepares to take up a bill that will give Congress 60 days to review any final agreement with Iran. Drillers in the U.S. reduced the number of active rigs seeking oil to the fewest since December 2010, according to Baker Hughes Inc.

Oil on Friday capped its longest run of weekly increases since February 2014 amid speculation a rebound in Iranian shipments won’t be imminent. The government in Tehran reached a preliminary pact with world powers on April 2 that would trade nuclear restrictions for a lifting of economic sanctions, with a final accord planned for June 30. Prices are still down almost 3 percent this year as near-record U.S. output boosted stockpiles to the highest level in more than three decades.

“There are some doubts about the negotiations with Iran,” Ric Spooner, a chief strategist at CMC Markets in Sydney, said by phone. “While the big build in U.S. inventories is a concern, the market is conscious that there’s a good chance that we’re going to see production cuts.”

West Texas Intermediate for May delivery was at $51.68 a barrel in electronic trading on the New York Mercantile Exchange, up 4 cents, at 1:36 p.m. Singapore time. The contract climbed 85 cents to $51.64 on Friday. Total volume was about 42 percent below the 100-day average.

Iran Supplies

Brent for May settlement was 4 cents lower at $57.83 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $6.12 to WTI.

U.S. Secretary of State John Kerry, Treasury Secretary Jacob J. Lew and Energy Secretary Ernest Moniz will hold a closed-door meeting Monday for members of the House of Representatives, according to Lew’s published schedule. A similar briefing for senators will be held Tuesday. Lawmakers return to Washington this week after a two-week recess.

Iran could boost crude exports by 1 million barrels a day within a few months of sanctions being lifted, Oil Minister Bijan Namdar Zanganeh said March 16. Its shipments have fallen by half to about 1 million barrels a day after sanctions were imposed in mid-2012. The Persian Gulf nation tied Kuwait last month as the third-largest producer in the Organization of Petroleum Exporting Countries, a Bloomberg survey showed.

In the U.S., the active-rig count dropped to 760 last week, a decline of 52 percent over 18 weeks, according to data from Baker Hughes, an oilfield services company.

Crude stockpiles in the world’s biggest oil consumer expanded to 482.4 million barrels through April 3, the Energy Information Administration reported on April 8. That’s the highest level in weekly records from the Energy Department’s statistical arm dating back to August 1982.

By Bloomberg