Crude prices edged up to place them firmly on course for a weekly gain in what will be its strongest stretch of weekly advances since February 2014.
Despite a volatile week of trading, the prices gained more than 1% on increased confidence that the framework deal to constrain Iran’s nuclear program would not result in a rapid gain in Iran’s oil exports.
Light, sweet crude for May delivery erased modes losses in the morning to most recently advance 75 cents or 1.44% $51.24 a barrel on the New York Mercantile Exchange.
The US benchmark is now on course for a 4.3% gain this week having shrugged off a 6% decline on Wednesday weighed down by another record gain in supply to the US inventories.
Brent futures, the global benchmark, edged up by 94 cents or 1.7% to trade at $57.51 a barrel on the London-based ICE Futures Exchange.
Oil gained on Thursday after remarks by Iran’s supreme leader Ayatollah Ali Khamenei that the world powers and the other negotiating parties must remove all economic sanctions on the country after the definitive agreement to curb the country’s nuclear program is reached.
According to Bloomberg, the comments were bullish for crude prices having introduced a political hurdle to the completion of the deal by the self imposed deadline in June.
A slower return to exporting oil by Iran is seen as favorable to traders but analysts at Citibank told MarketWatch that the timing could still be an issue.
“The timing is interesting as the increase could come precisely when the low oil prices should start to have a greater impact on the production-growth rate in the United States,” they said.
“In other words, the anticipated decline in oil production by the U.S. may be (more than) offset by increased exports from Iran. Thus the period of low oil prices may become longer.”
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