Oil fluctuates near US$93 with stellar rally taking a breather

Brent oil traded near US$93 a barrrel following a run of seven weekly gains that’s pushed crude to the highest level since 2014.

Brent oil traded near US$93 a barrrel following a run of seven weekly gains that’s pushed crude to the highest level since 2014.

Futures in London rose 0.2 per cent after earlier touching US$94 a barrel. Marathon Petroleum Corp.’s 593,000 barrel-a-day Galveston Bay refinery in Texas was shut after cold weather. Oil product markets surged after the news, with heating oil margins climbing to their strongest since April 2020, while crude’s structure cooled.

Traders also continue to watch the Iran nuclear deal negotiations, with diplomats set to return to Vienna Tuesday. On Friday, the U.S. signed several sanctions waivers related to Iran’s civilian nuclear activities, though Tehran said it still needs guarantees from Washington in order to revive the deal.

Though crude has begun the week on the back foot, the oil market’s structure has been indicating one of the strongest supply-demand balances in years. That has come as the average price of gasoline in the U.S. rose to the highest level in more than seven years and calls for US$100 a barrel by some of Wall Street’s biggest names grow louder.

 “I would expect prices to remain around where they are, but there is definitely the risk to the upside,” said Fiona Boal, head of commodities and real assets at S&P Dow Jones Indices. “Demand is been incredibly tight. I have been amazed -- particularly in the U.S. -- with the distillate demand.”