Oil climbed in New York on Friday as the supplies stowed at the biggest US storage hub dwindled, while London-traded futures were more subdued after a report that OPEC and allied producers might lift output.
Futures in New York rose 0.7 percent, while the Brent contract was little changed.
Stockpiles at a key pipeline nexus in Oklahoma are shrinking so fast that fears are growing that some tanks might bottom out.
OPEC and other major exporters are to meet today in Algiers to consider their next move as US pressure increasingly isolates the cartel’s No. 3 producer, Iran.
“Until the sanctions hit and until we actually sees what OPEC does, we’re going to have some movements like that where you have some excitement, then a little bit of a pullback,” said Mark Watkins, who helps oversee US$151 billion at US Bank Wealth Management.
Prices briefly crashed on Friday when Reuters reported that the OPEC-led group was discussing a 500,000-barrel daily production increase.
US sanctions have discouraged major crude buyers from purchasing Iranian cargoes, effectively shrinking available supplies.
Isolating Iran might vault crude to US$90 a barrel, JPMorgan Chase & Co said.
“If Saudi Arabia doesn’t commit to substituting most of that loss, 500,000 barrels a day will not be enough to cover the market,” said Bart Melek, head commodity strategist at Toronto Dominion Bank.
The OPEC gathering might indicate whether the group has “the barrels available to fully cover the Iranian lost output,” said John Kilduff, a partner at New York-based hedge fund Again Capital LLC.
US President Donald Trump chided the cartel on Thursday, tweeting that the group “must get prices down now!”
Iranian Minister of Petroleum Bijan Namdar Zanganeh said the group has no authority to impose a new supply arrangement.
West Texas Intermediate (WTI) for November delivery on Friday rose US$0.46 to settle at US$70.78 a barrel on the New York Mercantile Exchange. The contract rose 2.4 percent from last week’s US$69.14 a barrel.
Total volume traded was about 50 percent above the 100-day average.
Brent for November rose US$0.10 to settle at US$78.80 on the ICE Futures Europe exchange. The contract gained 0.6 on the week.
The global benchmark traded at an US$8.02 premium to WTI for the same month.
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