LONDON: Oil slipped on Monday but still held close to its highest since early February, supported by comments from Saudi Arabia that it would continue to curb shipments in line with the OPEC-led effort to cut global supplies.
Brent crude was down 17 cents at $67.14 a barrel at 1258 GMT, after rising almost 4 percent last week. US West Texas Intermediate crude was down 3 cents at $63.52 a barrel after rising 3 percent last week.
Both contracts earlier rose to their highest since Feb. 7.
A cold snap across Europe has encouraged some refiners to delay maintenance, which could support demand and help end a mild bout of profit-taking, analysts said.
“There is a bit of a bearish twinge to everything ... but we believe in the second half (of the year), you’ll see demand pull the market back up again,” Natixis oil analyst Joel Hancock said.
“Our view is demand will be strong enough, but we don’t see a big breakout,” he said, adding the expected a price in the range of $60 to $70 this year.
Prices drew some support from Saudi Energy Minister Khalid Al-Falih, who on Saturday said the country’s crude production in January-March would be well below output caps, with exports averaging less than 7 million barrels per day.
He said Saudi Arabia hoped OPEC and its allies would be able to relax output curbs next year and create a permanent framework to stabilize oil markets after the current agreement on supply cuts ends this year.
“A study is taking place and once we know exactly what balancing the market will entail, we will announce what is the next step. The next step may be easing of the production constraints,” he told reporters in New Delhi.
“My estimation is that it will happen sometime in 2019. But we don’t know when and we don’t know how.”
US energy firms added one oil rig last week, the fifth weekly increase in a row, bringing the total count up to 799, the highest since April 2015, Baker Hughes energy services firm said on Friday.
Hedge funds and money managers upped their bullish wagers on US crude oil for the first time in four weeks, data showed on Friday.
Meanwhile, Libya’s National Oil Corp. said on Saturday it had declared force majeure on the 70,000 bpd El Feel oilfield after a protest by guards closed the field.
Oil steady after hitting three-week high, Saudi Arabia offers support
Oil steady after hitting three-week high, Saudi Arabia offers support
US pump prices surge as Iran war upends global energy supply
- Fuel prices jump over 10 percent as oil prices surge
- Analysts predict further price rises due to market conditions
MARIETTA/NEW YORK : US retail gasoline and diesel prices are soaring as the US-Israel war with Iran constrains oil and fuel exports, which could be a political test for President Donald Trump’s Republican Party ahead of midterm elections in November.
Fuel prices jumped more than 10 percent this week as oil rose above $90 a barrel, its highest in years, adding pain at the pump for consumers already strained by inflation.
Trump on Thursday shrugged off higher gasoline prices in an interview with Reuters, saying “if they rise, they rise.”
The president had vowed to lower energy prices and unleash US oil and gas drilling during his second term, but much of his tenure has been marked by volatility and uncertainty amid shifts in policies like tariffs and geopolitical turmoil.
The US is the world’s largest oil producer. It is a major exporter but also imports millions of barrels a day since it is the world’s largest oil consumer.
As of Friday, the national average prices for regular gasoline stood at $3.32 a gallon, up 11 percent from a week ago and the highest since September 2024, according to data from the motorists association AAA. Diesel was at $4.33, up 15 percent from a week ago, surging to the highest since November 2023.
Midwest, south feel the pinch
US motorists in parts of the Midwest and the South, including states that supported Trump, have seen some of the steepest increases in fuel costs since the conflict in Iran started.
In Georgia, a swing state, average retail gasoline prices rose 40.1 cents a gallon over the past week, according to fuel tracking site GasBuddy.
Andrenna McDaniel, a health care insurance worker in South Fulton, Georgia, said she was surprised to see prices skyrocket overnight.
“They jumped up so quickly,” she said on Friday, adding that she does not agree with the war at all.
McDaniel, a Democrat, said that for now she is only driving for the most important things, and feels lucky that she works from home so she does not have to drive as much as other people do. Georgia voted for Donald Trump in the 2024 election.
Trump voter Richard Soule, 69, a US Air Force veteran and a retired firefighter, said a little pain at the pump is worth Trump’s efforts to protect America.
“When President Trump went in there and bombed out their nuclear, and they just thumbed their nose at it, I believe he did the right thing at the right time,” Soule said on Friday as he filled up his Ford F-150 truck in Marietta, Georgia.
Other states, including Indiana and West Virginia have seen prices rise by 44.3 cents and 43.9 cents, respectively.
Prices may rise further
More pain may be on the way, analysts said, as oil prices continue to trend upward. On Friday, US oil futures settled at $90.90 a barrel, up nearly $10 and the biggest single-day rise since April 2020.
“Given current market conditions, the national average price of gasoline could climb toward $3.50 to $3.70 per gallon in the coming days if oil continues rising and supply disruptions persist,” GasBuddy analyst Patrick De Haan said.
The disruptions in the Middle East and the Strait of Hormuz, a key trade conduit, have boosted demand for US oil abroad, which in turn has driven up prices for domestic refiners too.
“The US has weaned itself off of its dependence on Middle Eastern crude, but obviously Asian refineries, and to a lesser extent, European refineries have not,” Denton Cinquegrana, chief oil analyst with OPIS. “That’s what you’re seeing happen in the spot market, because the demand for US exports rise, and so the price rise.”
Seasonal factors could add further pressure. Gasoline prices typically go up in the spring and peak in the summer due to higher gasoline demand and production of summer-blend gasoline, which is more costly to produce. Diesel fuel saw an even more aggressive jump since Iran began retaliating against US and Israeli strikes, significantly disrupting shipping in the Strait of Hormuz.
Global diesel inventories have remained in tight supply due to heavy demand for heating and power generation during a prolonged winter in the US and other parts of the world and a structural tightness of refining capacity. Sticker prices of everything from food to furniture go up when the cost of diesel goes up, as the fuel is mainly used in freight transportation, manufacturing, agriculture, and global shipping, analysts said.
“In a world where buzzword seems to be ‘affordability’, that is certainly not going to help,” Cinquegrana said.
