Global oil prices rallied on Monday to resume gains that were temporarily halted on Friday by correction and profit taking, with market focus on Iran’s supply prospects and Saudi Arabia’s suspension of crude through the Bab al-Mandab Strait.
By 10: 49 GMT, US crude rose to $ 69.55 a barrel from the opening level of $ 69.00, recording a high of $ 69.59, and a low of $ 68.78.
Brent crude rose to $ 74.60 per barrel from the opening level of $ 74.29 and recorded a high of $ 74.75 and a low of $ 74.11.
US crude lost 0.8% on Friday, losing four days, and Brent fell more than 0.2%, on correction from a week high of $ 74.84 per barrel.
Over the past week, oil prices rose by an average of 1.3% in the first weekly gain in a month, supported by Saudi Arabia’s suspension of crude transportation across the Bab al-Mandab Strait, and US commercial inventories fell to a three-and-a-half year low.
Most of the prospects for the oil market suggest that Iran’s supply will drop by 500 to 700,000 barrels per day (bpd) starting next November, when the actual US sanctions will come into effect. The prospects also suggest that if US President Donald Trump succeeds in the strong pressure on countries importing from Tehran, Iran supplies about 2 million barrels per day.
Saudi Arabia, the world’s largest oil exporter, said it was suspending the shipment of oil through the Bab al-Mandab Strait in the Red Sea, “one of the most important routes for oil tankers in the world.” The decision came after Houthi rebels attacked two giant Saudi oil tankers in the Red Sea.
US drilling and exploration platforms last week increased by 3 platforms to a total of 861 platforms, the second weekly increase in a month, official data from Baker Hughes said on Friday.
Thanks to high drilling activities, US production has jumped by more than 30% since mid-2016 to a total of 11.0 million barrels per day, surpassing Saudi Arabia’s high production in June to 10.7 million barrels per day and close to Russia’s world’s largest oil producer, Million barrels per day.