Oil Climbs as Saudi Isolation Grows Over Missing Regime Critic
(Bloomberg) -- Oil rose from a one-month low after U.S. President Donald Trump promised “very severe” consequences in the case of a missing critic of Saudi Arabian leaders.
Futures gained 0.7 percent in New York on Friday, trimming its weekly loss to 3.1 percent. Trump’s remarks came as multiple investigations into Jamal Khashoggi’s disappearance dragged on more than two weeks after he entered the Saudi consulate in Istanbul. Ex-U.S. solicitor-general Ted Olson’s law firm said it is no longer lobbying on behalf of the kingdom, and noted oil IHS Markit Ltd. analyst Dan Yergin won’t attend the ‘Davos in the Desert’ event in Saudi Arabia.
Although the Saudis appear unlikely to follow through on threats to use oil as an economic weapon, “they could potentially do something if they wanted to,” said Josh Graves, senior market strategist at RJO Futures in Chicago.
Trump on Thursday told reporters that it “certainly looks” like Khashoggi is dead, even as his administration awaits the results of probes by Turkish authorities and the Saudi themselves.
Crude has retreated nearly 10 percent since reaching an almost four-year high earlier this month on concern that high prices will hurt demand, particularly in emerging economies already beset with other financial strains.
West Texas Intermediate for November delivery rose 47 cents to settle at $69.12 a barrel on the New York Mercantile Exchange. Total volume traded was about 16 percent below the 100-day average.
Brent for December settlement rose 49 cents, or 0.6 percent, to close at to $79.78 a barrel on the London-based ICE Futures Europe exchange. The global benchmark’s premium was $10.50 to WTI for the same month.
See Also: Khashoggi Disappearance May Be Black Swan Moment for Oil Prices
In the U.S., the Energy Information Administration said nationwide crude inventories rose by 6.49 million barrels last week, more than the 2.5 million-barrel increase forecast in a Bloomberg survey. Stockpiles have risen more than 22 million barrels over the past four weeks as domestic drillers ramped up production, while refineries halted some operations for seasonal maintenance.
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