Oil futures fell Friday, on track to break a string of eight consecutive weekly gains, as prospects for restoring the Iran nuclear deal outweighed fears of supply disruptions should Russia invade Ukraine.
West Texas Intermediate crude for March delivery
fell $1.68, or 1.9%, to $88.36 a barrel on the New York Mercantile Exchange, putting the front-month U.S. benchmark on track for a 3.4% weekly fall.
March natural gas
rose 1% to $4.53 per million British thermal units, leaving it up 14.9% for the week.
“Oil prices are headed for a substantial weekly loss as the prospect of Iranian supply hitting the markets soon has overpowered fears around Ukraine,” said Marios Hadjikyriacos, senior investment analyst at XM, in a note.
The U.S. is indirectly participating in international negotiations with Iran in Vienna. Reuters on Thursday reported that a draft agreement laid out a series of mutual steps that would bring both sides back into full compliance but didn’t include immediate waivers on oil sanctions.
In a Thursday research note, analysts at RBC Capital Markets reiterated their view that if a new agreement is reached, Iran’s exports would likely climb by 500,000 barrels in six months, and by 1 million barrels in 12 months.
On Thursday fears of a Russian invasion of Ukraine sparked a selloff in assets perceived as risky, with the Dow Jones Industrial Average
suffering its biggest daily loss of 2022 as investors piled into safe havens including gold and U.S. Treasurys.
Diplomatic efforts aimed at heading off an invasion were being closely watched, with Biden expected to speak with European leaders on Friday. State Department spokesman Ned Price said late Thursday that U.S. Secretary of State, Antony Blinken, and Russian Foreign Minister Sergei Lavrov would meet late next week, “provided there is no further Russian invasion of Ukraine,” according to new reports.