Oil Trades Near $54 as Iran Tension Offsets Rising U.S. Drilling

Futures rose 0.2 percent in New York, extending a third weekly gain. U.S. President Donald Trump’s administration imposed new sanctions on Iran and warned the Islamic Republic that it was “playing with fire” by testing missiles. U.S. drillers boosted the rig count by 17 to 583, the most since October 2015, according to Baker Hughes Inc.

“Geopolitical risk and the oil nations’ production cuts give a floor to prices,” said Giovanni Staunovo, an analyst at UBS Group AG. “Fears of a too strong U.S. supply response and U.S. oil inventories are limiting the upside at present. The next trigger for prices will come from the production cuts leading to inventory draw-downs.”

West Texas Intermediate for March delivery was at $53.98 a barrel on the New York Mercantile Exchange, up 15 cents, at 11:41 a.m. in London. Total volume traded was about 33 percent below the 100-day average. The contract gained 29 cents, or 0.5 percent, to $53.83 on Friday.

Brent for April settlement rose 5 cents to $56.86 a barrel on the London-based ICE Futures Europe exchange. Prices advanced 2.3 percent last week. The global benchmark crude traded at a premium of $2.19 to April WTI.
more at:  https://www.bloomberg.com/news/articles/2017-02-06/oil-trades-near-54-as-u-s-shale-boom-tests-opec-supply-cuts

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