Oil futures marked a third straight session loss Friday, with traders concerned that a potential deal with Iran could add to a global glut of crude supplies.
August crude fell 7 cents, or 0.1%, to settle at $59.63 a barrel on the New York Mercantile Exchange. The August contract fell 0.6% for the week, but compared with the July contract, which was the front-month contract last Friday, prices saw a weekly gain of 2 cents. August Brent crude on London’s ICE Futures exchange added 6 cents, or 0.1%, to $63.26 a barrel, scoring a 0.3% gain on the week
“It appears as though investors are growing worried about the possibility of Iran flooding the already-saturated global oil market soon,” said Fawad Razaqzada, technical analyst at FOREX.com. A final nuclear agreement between Western powers and Iran over the country’s nuclear program is due June 30. A decisive pact is expected to pave the way for lifting Western sanctions and allowing additional Iranian crude to be exported to global markets. In Iran, however, Supreme Leader Ayatollah Ali Khamenei has taken a harder line over his country’s nuclear program this week, putting negotiations for a final agreement at risk ahead of the deadline. The outcome isn’t certain, but “if sanctions over Iranian oil are lifted, this could have a major impact on oil prices,” said Razaqzada.
Meanwhile, oil traders kept an eye on developments tied to Greece’s debt woes. The Wall Street Journal reported that Greece and its creditors are set for another clash over how to reduce the country’s debt, even if they agree on the terms of a new bailout funding in the coming days. The situation in Greece has the potential to hurt energy demand from Europe, as well as move the euro and in turn, the U.S. dollar Commodities priced in dollars often trade inversely with the dollar, as moves in the U.S. unit can influence the attractiveness of those commodities to holders of other currencies.
Data from Baker Hughes Friday showed that the total number of active U.S. drilling rigs climbed by 2 to 859 as of June 26. The count of active oil rigs fell for a 29th week in a row, down 3 to 628.