Oil fell again, extending its biggest retreat in two months, after U.S. President Donald Trump renewed his push for lower prices and Russia said it would soon resolve a problem with contaminated supplies.
Futures retreated as much as 1.3 percent in New York in a fourth day of decline. Prices slumped 2.9 percent on Friday as President Trump said he’d personally pressed OPEC to keep prices down. Russia’s assurances it will resume normal oil flows to eastern Europe in two weeks after a chemical contamination also allayed concerns about supply.
Oil hit a six-month high last week after the White House announced it will tighten sanctions on Iranian crude flows, discontinuing exemptions that allow China and some other buyers to keep importing. Traders are focused now on whether OPEC’s de facto leader, Saudi Arabia, will bolster production to compensate for the lost supply, though the kingdom has signaled it’ll take a cautious approach.
“The U.S. president clearly on-boarded the Saudis before tightening the screws on Iran,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd. in London. Ultimately, the kingdom will probably “lead efforts to prevent the oil market from over-tightening.”
West Texas Intermediate for June delivery fell 67 cents to $62.63 a barrel on the New York Mercantile Exchange at 10:16 a.m. in London. The contract declined 1.1 percent last week, ending seven weeks of gains.
Brent for June settlement lost 90 cents to $71.25 a barrel on the London-based ICE Futures Europe exchange. The contract declined 3 percent on Friday, the biggest drop since Feb. 25. The global benchmark crude was at a premium of $8.58 to WTI.
“Oil’s finding its place between $60 and $65 and the range seems to be about right as supplies are still looking tight, while there are limitations for an additional rally,” said Ahn Yea Ha, a commodities analyst at Kiwoom Securities Co. in Seoul. “Further gains will be restricted by Saudi Arabia, along with other producers including the U.S., as no one wants to see a rapid increase in prices that would hurt consumption.”
After briefing reporters on Friday, Trump said on Twitter he had spoken to Saudi Arabia and other suppliers about boosting oil flows and that “all are in agreement.” The U.S. president hasn’t spoken with officials at OPEC’s secretariat in Vienna, according to a person with knowledge of the matter.
Saudi Energy Minister Khalid Al-Falih said last week that the world’s biggest oil exporter will cater to customers’ needs, but doesn’t see the need for an immediate response to the Iran situation. The kingdom opened the taps last year when the Trump administration promised to crack down on Iran, only to see Washington take a softer approach at the last minute.
In Russia, pipeline operator Transneft PJSC said it had identified the source of the contamination that had forced some refineries to stop taking crude deliveries, blaming a private storage terminal in the center of the country for feeding chlorides into the link. President Vladimir Putin said law enforcement may become involved in the investigation if necessary.
Other oil-market news: OPEC+ states including Saudi Arabia are complying with the terms of the agreement to limit oil output, Russia’s Putin said. Hedge funds have increased their bullish sentiment on U.S. crude prices for the last nine weeks, the longest such run since 2006, according to data released Friday. Gasoline futures in New York dropped 0.8 percent to $2.08 a gallon, after retreating 1.5 percent on Friday.