Crude rose to a one-week high July 10 on concern shrinking U.S. crude stockpiles will exacerbate wide-ranging global supply disruptions.
Futures in New York advanced 0.4% on July 10.
Production and export hiccups from Canada to North Africa and the Persian Gulf have been compounded by a Norwegian oilfield strike. At the same time, U.S. crude stockpiles dropped by almost 4 million barrels last week, according to a Bloomberg survey. In London, Brent futures approached the $80-a-barrel mark not touched since May.
RELATED: Diesel inches up 0.7¢ to $3.243
“The Norwegian strike is sort of adding insult to injury,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Mass. “The market is just so tight now that pretty much any little thing is going to push it up.”
Global production curtailments combined with U.S. sanctions aimed at slashing Iranian crude exports have traders concerned about tightening supplies. In Norway, the strike has curtailed output for the first time in six years as Royal Dutch Shell Plc shut a North Sea field.
Geopolitical risks, shrinking spare-production capacity, and wariness that OPEC may renege on pledges to raise output are creating a “perfect storm” in crude markets, said Ehsan Khoman, an analyst at MUFG Bank.
West Texas Intermediate crude for August delivery advanced 26 cents to settle at $74.11 a barrel on the New York Mercantile Exchange. Total volume traded was 11% below the 100-day average.
Brent for September settlement climbed 79 cents to end the session at $78.86 on the London-based ICE Futures Europe exchange after reaching as high as $79.51 during the session.
The global benchmark traded at a $6.30 premium to WTI for the same month.
In the U.S., crude stockpiles at the key pipeline hub in Cushing, Okla., probably dropped by 1.3 million barrels last week, according to a forecast compiled by Bloomberg. The industry-funded American Petroleum Institute will release its weekly tally of inventories later on July 10.
Other oil-market news:
• Gasoline futures rose 0.6% to settle at $2.1603 a gallon.
• The U.S. will consider applications for exemptions from the sanctions on buying Iranian oil, Secretary of State Mike Pompeo said in a transcript of an interview with Sky News Arabia that was posted on the State Department website.
• Senior officials from the State Department and the U.S. Treasury spent three days in Saudi Arabia discussing new ways to cut money flows to Iran and making sure any cuts to Iran oil purchases don’t disrupt markets, a senior State Department official said.
With assistance from Sharon Cho, Tsuyoshi Inajima and Grant Smith.