Oil futures flipped between small gains and losses Monday to kick off a new week of trading after prices suffered their first weekly loss in three through last Friday as energy-demand worries persist.
August West Texas Intermediate crude CLQ19, -0.10% were 4 cents, or 0.1%, to $57.47 a barrel on the New York Mercantile Exchange. The contract lost 1.6% for last week, according to Dow Jones Market data.
International benchmark September Brent BRNU19, -0.09% edged 2 cents lower, or less than 0.1%, to $64.21 a barrel on ICE Futures Europe. Brent declined 0.8% for last week. Oil futures had posted minor gains in earlier action.
Demand essentially took over supply issues in recent sessions. Earlier last week, the Organization of the Petroleum Exporting Countries and allied producers agreed to extend their production-cut agreement through March 2020, in a largely expected move.
Read: OPEC, allies waging a battle to keep oil prices supported amid trade tensions
“Even the strong U.S. employment data on Friday failed to lift the mood [in commodities markets], although it did prompt a sharp drop in precious metals prices. While we think that slower global growth will indeed depress oil consumption this year, the decision by OPEC+ to extend its 1.2 million-barrel-per-day output cut for another nine months should at least act as a floor under the oil price,” said Caroline Bain, chief commodities economist with Capital Economics, in a research note.
Read: Here are the best- and worst-performing commodities in the first half of 2019
The OPEC decision came as officials there keep close tabs on the risk to demand from global trade tiffs and as tensions percolate between Iran and the West.
Iranian officials said Monday the Islamic Republic remains open to diplomacy to save its 2015 nuclear deal with world powers but has “no hope” in the international community, the country’s Foreign Ministry spokesman said Monday, according to the Associated Press, as his nation over the weekend broke the limit the agreement put on its enrichment of uranium.
“Iran’s violation of the agreement could now prompt Europe to impose sanctions on Iran, too. For example, the EU could impose an oil embargo on Iran, as it did between 2012 and 2015,” said Carsten Fritsch, energy analyst with Commerzbank. “This would have no direct impact on Iranian oil exports as Europeans have in any case not bought any Iranian oil since the end of 2018 because of the U.S. sanctions; this is presumably one reason for Iran’s dissatisfaction and for the aforementioned ultimatum.”
“Indirectly, however, Iranian oil shipments could certainly be hampered by new EU sanctions given that these would no doubt apply also to the banking and insurance sector,” he added. “In this case, the remaining buyers of Iranian oil would find it even more difficult to transact and insure their purchases — after all, most of the insurance companies active in the shipping sector are based in London.”
Rounding out trading, August gasoline US:RBN19 fell less than a cent, or 0.2%, to $1.9263 a gallon, after scoring a rise of 1.7% for last week. August heating oil US:HON19 slipped 0.1% to $1.9023 a gallon after a weekly loss of 1.8%.
Natural-gas futures, meanwhile, rallied last week and again on Monday on the back of warmer weather forecasts, with August natural gas US:NGN19 up 1 cent, or 0.5%, at $2.431 per million British thermal units. It wrapped Friday at $2.418, the highest finish for a front-month contract since May 31. Prices logged a weekly rise of 4.8%.
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