NEW YORK -Oil prices rose to the highest in two weeks on Thursday, supported by hopes for a trade deal between the United States and the European Union and new U.S. sanctions to curb Iranian oil exports, which continued to elevate supply concerns.
Brent crude futures rose $1.86, or 2.82%, to $67.71 a barrel by 1:20 p.m. EDT (1720 GMT), and U.S. West Texas Intermediate crude was at $64.46 a barrel, up $1.99, or 3.19%.
Both benchmarks settled 2% higher on Wednesday at their highest levels since April 3 and are on track for their first weekly rise in three weeks. Thursday is the last settlement day of the week ahead of the Easter holidays and trade volumes are expected to be thin.
U.S. President Donald Trump said on Thursday there would be a trade deal with the European Union before his 90-day pause for reduced tariffs expires, according to media reports. “We’re going to have very little problem making a deal with Europe or anybody else, because we have something that everybody wants,” Trump told reporters.
Reaching a trade deal with the EU could potentially limit demand destruction from Trump’s tariffs, said Bob Yawger, director of energy futures at Mizuho.
Sanctions issued by Trump’s administration on Wednesday, including against a China-based “teapot” oil refinery, ramp up pressure on Tehran amid talks on the country’s nuclear programme. “Teapot” is an industry term for small, independent and simple oil refiners.
“These are far ranging sanctions, focusing on the Chinese teapot refineries,” said John Kilduff, partner with Again Capital. “It’s a potential supply loss to the market.”
Washington also issued additional sanctions on several companies and vessels it said were responsible for facilitating Iranian oil shipments to China as part of Iran’s shadow fleet.
“The U.S. continues to aggressively sanction Iran and impose sanctions against buyers of Iranian oil. OPEC+ has also provided updates and reassurance to the market, stating that they remain in control with flexibility to cut production if needed,” analysts at energy consulting firm Gelber and Associates said in a note.
The Organization of the Petroleum Exporting Countries (OPEC) said on Wednesday it had received updated plans for Iraq, Kazakhstan and other countries to make further output cuts to compensate for pumping above quotas.
However, OPEC, the International Energy Agency and several banks, including Goldman Sachs and JPMorgan, cut forecasts on oil prices and demand growth this week as U.S. tariffs and retaliation from other countries threw global trade into disarray.
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