US-Iran Tensions Lift Oil

By Glenn Dyer | More Articles by Glenn Dyer

Like gold, oil had a very strong week – thanks to the rising tensions between Iran and the US.

Oil futures rose on Friday, with US West Texas Intermediate (WTI) futures nearly 9% for the week and highest settlement price so far in June.

And adding to the pressures in the US gasoline (petrol) futures surged after a fire damaged processing units at the biggest refinery on the US east coast – which could see shortages emerge next week.

Explosions and a fire were reported at a 150-year-old refinery complex in Philadelphia on Friday morning.

The Philadelphia Energy Solutions refining complex processes 335,000 barrels of crude oil daily.

On Friday, the new front-month contract, August West Texas Intermediate crude futures rose 36 cents, or 0.6%, to settle at $US57.43 a barrel in New York.

Based on front-month prices, WTI finished at its highest since May 29 and it rose 8.8% for the week, the biggest percentage gain since the week ended December 2, 2016.

Also on Nymex, July gasoline futures shot up by about 7 cents or 3.9% to $US1.856 a gallon in reaction to the refinery news. That saw gasoline futures end the week up 7.1%. Heating oil futures also rose thanks to the fire news.

Futures prices for the fuel marked their highest settlement since late May and logged a weekly rise of 7.1%.

The weekly rig use report from Baker Hughes – which revealed that active US drilling-rigs edged up by 1 to 789, following two consecutive weeks of declines – had no impact on trading.

Meanwhile, OPEC and its allies (mainly Russia) will hold meetings on July 1-2. The meeting was due to be held on June 25 and 26.

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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