Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Crude posts one of its largest weekly gains since '11, despite Fri drop

CommoditiesMar 28, 2015 01:40AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
WTI crude fell below $49 a barrel, while brent dropped under $57 a barrel on Friday -- While crude futures fell by more than $2 a barrel on Friday as supply concerns related to the crisis in Yemen diminished, oil prices still ended the week with one of its highest weekly gains in more than four years.

Although Saudi Arabian-led airstrikes against Shiite-backed Houthi rebels in Yemen continued on Friday, questions arose on the impact of the attacks on the nation's oil supply. Yemen is strategically located on the Bab el-Mandeb, a strait that connects the Gulf of Aden with the Red Sea. Earlier this week, crude prices shot up amid heightened fears that the closure of the strait could limit oil exports out of the critical chokepoint.

Goldman Sachs (NYSE:GS), however, may have assuaged such fears with a contingency plan for oil tankers in the event that the strait is closed. In a note to investors, analysts from the bank raised the possibility that the tankers could be diverted to travel around Africa if the strategic pathway is unavailable. In addition, U.S. Army General Lloyd Austin told a Senate hearing that the military will work with its Gulf and European partners to ensure that the strait remains open in spite of the conflict.

As a result, WTI crude for May delivery on the New York Mercantile Exchange fell $2.69 or 5.22% to $48.75 a barrel. On Thursday, WTI crude surged more than 5%, its largest daily increase for the month of March, after Saudi Arabia and Egypt announced plans for launching a ground attack against the Houthi militants. For the week, WTI crude increased by approximately 6% or $2.20 a barrel, one of its top weekly increases since 2011.

Meanwhile, British Foreign Secretary Philip Hammond indicated that the two sides negotiating an Iranian Nuclear pact were more than "halfway to a deal." An accord with Western powers could loosen sanctions against Iran, freeing up millions of barrels that are currently stored in reserves. Iran reportedly has 30 million barrels of stored oil ready for export once the sanctions are lifted. The added amounts could depress an oil market already inundated with a large supply glut.

Goldman Sachs downplayed the effects of both geopolitical events on crude prices.

"We expect both events to have negligible near-term supply impacts, with the build in crude inventories set to continue in the second quarter of 2015. Longer term, a deal with Iran could lead to greater Opec supplies although the timing of the sanction relief remains uncertain," the firm said in the investor note.

On the Intercontinental Exchange (ICE), brent crude for May delivery fell $2.83 or 4.78% to $56.36 a barrel. Brent futures rose by nearly 45 cents for the week.

The spread between the international and U.S. domestic benchmarks for crude stood at 7.61 a barrel, down from 8.55 at the start of the week.

Oil services firm Baker Hughes (NYSE:BHI) said in its weekly rig count that the number of oil rigs nationwide last week fell by 12 to 813. A week earlier, the number of oil rigs in the U.S. decreased by 56. The reduction of 12 rigs marks the lowest weekly decline in nearly four months.

Crude posts one of its largest weekly gains since '11, despite Fri drop

Related Articles

Oil heads for sixth weekly gain amid supply concerns
Oil heads for sixth weekly gain amid supply concerns By Reuters - Jan 28, 2022

By Yuka Obayashi TOKYO (Reuters) -Oil prices rose on Friday, set for their sixth weekly gain, amid concerns of tight supplies as major producers continue their policy of limited...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Saved. See Saved Items.
This comment has already been saved in your Saved Items
please send me crude oil Targate, Low, High my Name is G venu prathap
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email