U.S. crude oil prices eased in post-settlement U.S. trade ahead of the Asian market open Friday, amid concerns over potentially weaker demand amid declines in emerging market currencies, but a move by the U.S. to further isolate Iran may provide support, especially for Brent.
NYMEX WTI fell 0.08 percent to US$65.41 a barrel in late U.S. trade on Thursday. ICE Brent settled up 0.95 percent to US$71.43 a barrel. NYMEX WTI rose 0.69 percent to US$65.46 a barrel.
Emerging market currencies have tumbled recently as a currency crisis in Turkey spurred fears of contagion; a stronger U.S. dollar makes oil more expensive in other currencies and can dent demand for oil. Additionally, concerns that the U.S. trade war will dent the global economy, and its demand for oil, have weighed on sentiment.
Separately, U.S. Secretary of State Mike Pompeo announced the formation of an Iran Action Group to coordinate the U.S. effort to re-impose economic sanction on Tehran and to pursue policies that put other diplomatic pressures on Iran.
Iran produced around 3.87 million barrels a day in 2017, according to OPEC.
State Department official Brian Hook was appointed as the Special Representative for Iran and said in a briefing to reporters that continued efforts would be made to get China, the world’s top crude oil buyer, to participate in the sanctions ahead of an early November date for a ban on importing Iranian crude.
“Our goal is to reduce every country’s import of Iranian oil to zero by November 4th, and we are prepared to work with countries that are reducing their imports on a case-by-case basis,” Hook said.
“As you know, those sanctions will come into effect on November 5th. Those will include sanctions on Iran’s energy sector, transactions by foreign financial institutions with the Central Bank of Iran, Iran’s shipping and shipbuilding sectors, among others. And the United States certainly hopes for full compliance by all nations in terms of not risking the threat of U.S. secondary sanctions if they continue with those transactions,” he said.
The Trump administration in May said it would re-impose the sanctions that were waived in 2015 as part of a multilateral deal on Tehran’s nuclear program.
Ahead, Baker Hughes reports U.S. weekly oil rig count figures at 1:00 p.m. U.S. EDT; they stood last week at 869.