WASHINGTON, D.C. (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange mostly firmed in early Friday trading ahead of Organization of Petroleum Exporting Countries meeting with non-OPEC producers, while geopolitical tensions loom large over the tightening global oil market.
Oil futures edged higher as market participants seek price indications ahead of the OPEC/non-OPEC monitoring committee meeting scheduled to be held in Jeddah this weekend. OPEC oil ministers said previously that the group is likely to extend the current production cut agreement, but tighter sanctions on Iran and geopolitical tensions in the Middle East could change the policy course. While Iran declined to send a representative to the key meeting, the country's oil production tumbled to 2.554 million bpd in April, the multi-year low level. The International Energy Agency said this week that Iran's oil output is bound to plunge even further this month to the lowest rate since Iran-Iraq war in the 1980s. United States President Donald Trump ended all waivers for purchases of Iranian oil in April, essentially restricting crude from the Islamic Republic in the global oil market.
As the White House tightened the grip on Iran's oil, tensions in the Middle East erupted this week after Saudi oil pipeline and tankers were hit with explosive drones. Saudi Arabia accused Iran of ordering the attacks on its oil infrastructure, while launching a retaliatory strike Wednesday night against Iran-backed Houthi rebels in Yemen. The U.S. reportedly pulled non-emergency personnel from its embassy in Iraq, citing threats from Iranian-backed forces. Saudi Aramco restarted operations at East-West Pipeline on Thursday, while the company remains on high alert for potential terrorist acts in the coming days.
Meanwhile, the U.S. stock market is set to open today's session lower based on overnight trade. The U.S. dollar spot index climbed 0.2% in early trading to 97.678, the highest in nearly three weeks, exerting downward pressure on WTI. On the economic data front, consumer sentiment figures are set for release 10:00 AM this morning.
At near 8:50 AM ET, NYMEX June West Texas Intermediate crude futures traded up 50cts to $63.37 bbl and the July Intercontinental Exchange Brent contract gained 26cts to $72.88 bbl.
NYMEX June RBOB futures rose 1.06cts to $2.0724 gallon and the spot month ULSD contract dipped 0.23cts to $2.1209 gallon.
Liubov Georges can be reached at firstname.lastname@example.org
Copyright 2019 DTN/The Progressive Farmer. All rights reserved.