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London - Oil advanced a third day as scepticism among US lawmakers over a nuclear deal with Iran undermined prospects that the Opec producer will bolster crude exports.
Futures climbed 1.6% in New York. President Barack Obama is dispatching three cabinet members to brief lawmakers as a Senate committee prepares to take up a bill that will give Congress 60 days to review any final agreement with Iran.
Drillers in the US reduced the number of active rigs seeking oil to the fewest since December 2010, according to Baker Hughes.
Oil capped its longest run of weekly increases since February 2014 on Friday amid speculation a rebound in Iranian shipments isn’t imminent.
The government in Tehran reached a preliminary pact with world powers on April 2 that would offer nuclear restrictions in return for a lifting of economic sanctions, with a final accord planned for June 30. Prices are still down about 1.5% this year as near-record US output boosted stockpiles to the highest level in more than three decades.
“I don’t see a return of Iranian oil in any major quantity this side of the new year,” Ole Hansen, an analyst at Saxo Bank A/S, said by e-mail from Copenhagen.
“It seems like we have as many versions of the agreement as we have countries involved in the process. Some of the discrepancies need to be hammered out first.”
Diplomatic Process
West Texas Intermediate for May delivery rose 84 cents to $52.48 a barrel in electronic trading on the New York Mercantile Exchange at 1:04 London time. The contract climbed 85c to $51.64 on Friday, capping a fourth weekly increase. Total volume was 6% below the 100-day average for the time of day.
Brent for May settlement gained as much as $1.67 to $59.54 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $6.05 to WTI.
US Secretary of State John Kerry, Treasury Secretary Jacob J. Lew and Energy Secretary Ernest Moniz will hold a closed-door meeting Monday with members of the House of Representatives, according to Lew’s published schedule. A similar briefing for senators will be held Tuesday. Lawmakers return to Washington this week after a two-week recess.
Iranian Shipments
Iran could boost crude exports by 1 million barrels a day within a few months of sanctions being lifted, Oil Minister Bijan Namdar Zanganeh said March 16. Its shipments have fallen by half to about 1 million barrels a day after sanctions were imposed in mid-2012.
The Persian Gulf nation tied Kuwait last month as the third-largest producer in the Organisation of Petroleum Exporting Countries, a Bloomberg survey showed.
Iran’s supreme leader Ayatollah Ali Khamenei said last week that economic sanctions on his country must be lifted as soon as an accord is signed, contradicting US and French descriptions of the political framework that negotiators announced on April 2 in Switzerland.
In the US, the number of rigs drilling for oil dropped to 760 last week, a decline of 52% over 18 weeks, according to data from Baker Hughes, an oilfield services company.
“The rig-count drop, combined with the belief that we are just weeks away from a peak in production, continue to attract short covering,” said Saxo Bank’s Hansen.
Crude stockpiles in the world’s biggest oil consumer expanded to 482.4 million barrels through April 3, the Energy Information Administration reported on April 8. That’s the highest level in weekly records from the Energy Department’s statistical arm dating back to August 1982.
