TEHRAN: Crude-oil futures settled higher Tuesday after a report indicated that Iran has shown willingness to work with other major crude producers to support the market. Prices had been trading lower as optimism for a production freeze faded and expectations of a ramp up in Iraqi and Nigerian production grew, but a report from Reuters sparked a reversal. Citing sources in the industry as well as at the Organization of the Petroleum Exporting Countries, the report said Iran is “sending positive signals” that it may support a joint effort to lift the oil market.
October West Texas Intermediate crude CLV6, -1.64% tacked on 69 cents, or 1.5%, to settle at $48.10 a barrel on the New York Mercantile Exchange after tapping lows under $47. Prices had suffered a drop of 3.5% on Monday, following seven straight sessions of gains. October Brent crude on London’s ICE Futures exchange LCOV6, -1.04% rose 80 cents, or 1.6%, to $49.96 a barrel. “Looks like Iran is potentially getting into cahoots with some of the OPEC nations to potentially freeze production level,” said Adam Koos, president of Libertas Wealth Management Group. “Russia is [apparently] all about the freeze as well,” assuming OPEC reaches an agreement. Speculation of a production freeze at the coming informal OPEC meeting “will continue to keep shortsellers from the market, and a bid under the price leading up to the September meeting,” said analysts for The 7:00’s Report said before the Iran news.
“But, there has been a bearish fundamental shift in recent weeks as more [oil] rigs continue to come online in the U.S., and weekly production declines very well may have reversed to increases,” they said. The American Petroleum Institute will issue its weekly report on petroleum inventories late Tuesday and the Energy Information Administration’s data come out early Wednesday. Analysts polled by S&P Global Platts are looking for an increase of 200,000 barrels for crude stockpiles and a drop of 1.6 million for gasoline supplies in the week ended Aug. 19.
