Adedapo Adesanya
By Adedapo Adesanya
The Brent and US West Texas Intermediate (WTI) crude oil benchmarks rose more than $1 a barrel on Friday as markets watched for signs of any direct conflict between Israel and Iran that could further tighten supplies.
Yesterday, Brent crude settled at $91.17 per barrel after it gained 52 cents or 0.57 per cent, and the US crude finished at $86.91 a barrel, up 32 cents or 0.37 per cent.
The two benchmarks recorded more than 4 per cent gains this week after Iran, the third-largest producer in the Organisation of the Petroleum Exporting Countries (OPEC), vowed revenge against Israel for an attack that killed high-ranking Iranian military personnel.
Despite the claims, Israel has not claimed responsibility for the attack on Iran’s embassy compound in Syria on Monday.
Iran on Friday warned of harsh retaliation, raising the spectre of a wider war and prompting the Israeli armed forces to suspend leave for all combat units on Thursday, a day after they said they were mobilising more troops for air defence units.
Israeli Prime Minister, Mr Benjamin Netanyahu, said on Thursday his country would harm “whoever harms us or plans to harm us”.
Market analysts noted that if Iran directly attacks Israel, something that has never happened before, it could create yet another geopolitical trouble that would see crude prices rise.
Meanwhile, ongoing Ukrainian drone attacks on refineries in Russia may have disrupted more than 15 per cent of Russian capacity, the North Atlantic Treaty Organisation (NATO) said, hitting the country’s fuel output.
OPEC+, this week kept its oil supply policy unchanged and pressed some countries to increase compliance with output cuts.
OPEC+ members, led by Saudi Arabia and Russia, last month agreed to extend voluntary output cuts of 2.2 million barrels per day until the end of June to support the market. When the voluntary curbs expire at the end of June, the total cuts by the alliance are set to decline to 3.66 million barrels per day as agreed in earlier steps starting in 2022.
In a statement following Wednesday’s meeting, OPEC+ said some countries had promised to improve their adherence to targets.
The panel welcomed pledges from Iraq and Kazakhstan to achieve full conformity and compensate for overproduction, and Russia announced that its cuts in the second quarter will be based on production, not exports. The panel scheduled its next meeting for June 1, the same day as the next full OPEC+ meeting to decide policy.
Also, US job growth soared in March, easily beating expectations, according to official data released on Friday which also showed a steady increase in wages.
The gain of 303,000 jobs last month points to likely robust oil demand but potentially delays anticipated interest rate cuts by the US Federal Reserve later this year.
