Oil prices inch up on Iran tensions and OPEC cuts

By Trend

Oil prices climbed on Friday, supported by tensions over Iran and a decision by OPEC and its allies to extend an output supply cut deal until next year, but mixed economic data limited the rally, Trend reports citing Reuters.

Brent LCOc1 was up $1.08, or 1.7%, to $64.38 a barrel by 2:02 p.m. EDT (1802 GMT). U.S. West Texas Intermediate (WTI) CLc1 gained 15 cents to $57.49 a barrel. The U.S. market was closed on Thursday for a national holiday, and WTI trade volumes remained light on Friday.

Both benchmarks were set to record weekly losses as concerns about a slowing global economy outweighed risks to supply.

“We’ve got mixed data – weak manufacturing data from around the globe, but then we have a strong job numbers in the U.S.,” said Phil Flynn, an analyst at Price Futures Group in Chicago.

German industrial orders fell far more than expected in May, and the Economy Ministry said this sector of Europe’s largest economy was likely to remain weak in coming months.

The U.S. Labor Department said nonfarm employers added 224,000 jobs last month, the most in five months, easing fears about weakening global demand for crude. However, new orders for U.S. factory goods fell for a second straight month in May, government data showed, stoking economic concerns.

The U.S. Energy Information Administration reported on Wednesday a weekly decline of 1.1 million barrels in crude stocks, smaller than the 5 million barrel draw reported by the American Petroleum Institute and less than analysts had forecast. USOILC=ECI

The Organization of the Petroleum Exporting Countries and other producers such as Russia, known as OPEC+, supported prices by extending their deal on supply cuts.

Tension in the Middle East also offered support, particularly to Brent. “Brent is pricing in more of the geopolitical risk than WTI,” Flynn said.

Iran threatened on Friday to capture a British ship after British forces seized an Iranian tanker in Gibraltar over accusations the ship was violating EU sanctions on Syria.