Oil advanced a third day as skepticism among U.S. lawmakers over a nuclear deal with Iran undermined prospects that the OPEC producer will bolster crude exports.
Futures rose 0.5 percent in New York. President Barack Obama is sending 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. Prices climbed as much as 2.8 percent earlier before paring gains after a report was said to show crude supplies increased at Cushing, Oklahoma, last week.
Oil capped its longest run of weekly gains since February 2014 on Friday amid speculation a rebound in Iranian shipments isn’t imminent. Prices are still down about 2.5 percent this year as near-record U.S. output boosted stockpiles to the highest level in more than three decades. Drillers in the U.S. cut the number of active rigs seeking oil to the fewest since 2010, according to Baker Hughes Inc., a sign that production may soon peak.
“Crude oil is up because of doubts that a final agreement about the Iranian nuclear program will be reached,” Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $3.4 billion, said by phone.
West Texas Intermediate for May delivery rose 27 cents to settle at $51.91 a barrel on the New York Mercantile Exchange. The contract climbed 85 cents to $51.64 on Friday, capping a fourth weekly gain.
Brent for May settlement climbed 6 cents to end the session at $57.93 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude closed at a $6.02 premium to WTI.
Futures retreated from their highs after Genscape Inc. was said to report an increase in crude stockpiles at Cushing last week, according to Phil Flynn, senior market analyst at the Price Futures Group in Chicago. The Oklahoma hub is the delivery point for WTI futures.
“You don’t have a fundamental reason to go higher,” said Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors. “We are going to see another build at Cushing.”
U.S. crude stockpiles expanded to 482.4 million barrels in the seven days ended April 3, the Energy Information Administration reported on April 8. That’s the highest level in weekly records dating back to August 1982.
“I’m perplexed that the market is trading higher,” Tom Finlon, a director of Energy Analytics Group LLC in Jupiter, Florida, said by phone. “We’re reaching critical levels at Cushing. It won’t be long before we’ve literally run out of space to put the oil there.”
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.
U.S. 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.
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 Organization 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 U.S. and French descriptions of the political framework that negotiators announced on April 2 in Switzerland.
In the U.S., the number of rigs drilling for oil dropped to 760 last week, a decline of 52 percent over 18 weeks, according to data from Baker Hughes, an oilfield services company.
Gasoline futures for May delivery slipped 0.27 cent to settle at $1.8046 a gallon. May ultra low sulfur diesel climbed 1.72 cents, or 1 percent, to close at $1.7833.