Oil Rallies as U.S. Supply Falls, Middle-East Tensions Rise

Joe Goldman |

OilCrude oil futures flipped Friday morning’s losses into gains, closing above $96 per barrel on Friday.  On the week, oil rallied around 4.4 percent.

Investors applauded Friday’s jobs report, sending oil to its highest level since May 21.  Some of the week’s negative economic sentiment turned positive after the economy added 175,000 jobs for the month, prompting crude to react positively to the better-than-expected number.

U.S. supply numbers were another driving force for the week’s rally in oil.  On Tuesday, the API announced that crude supplies fell 7.8 million barrels, which was almost eight times more than expected.



Oil analysts also believe that tensions in the Middle East could threaten global supplies.  According to Reuters, political sanctions have driven Iran’s oil exports to its lowest in decades.  Iran is the world’s third largest oil exporter and has reportedly lost two thirds of its exports following its latest round of sanctions.

The Syrian civil war also remains a threat to global oil supplies.  While Syria is far down the list of the world’s largest oil exporters, any form war in the region is a major threat to send oil prices higher if tensions escalate.
  
Despite the 4.4 percent rally in oil, most of the major integrated oil and gas companies traded flat for the week.  For the week, Chevron (CVX) fell 0.86 percent, BP (BP) rose 0.09 percent, Exxon Mobil (XOM) rose 1.08 percent, and Conoco Philips (COP) gained 1.60 percent after a market rally late Friday afternoon.
  

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
CVX Chevron Corporation 104.36 -0.64 -0.61 2,501,407 Trade
COP ConocoPhillips 44.29 -0.54 -1.21 5,845,121 Trade
XOM Exxon Mobil Corporation 81.34 -0.27 -0.33 5,662,969 Trade
BP BP p.l.c. 34.93 0.09 0.26 2,398,910 Trade
CUBE CubeSmart 24.55 -0.07 -0.26 722,984 Trade

Comments

Emerging Growth

Blow & Drive Interlock Corp

Blow & Drive Interlock Corp manufactures, markets, leases, installs and monitors a Breath Alcohol Ignition Interlock Device mechanism on the steering column of an automobile and into which a driver…

Private Markets

CF0005, LLC dba Mesa-Marshall #1-2

MESA Resources, Inc. ("MESA") is sponsoring the development of the oil & gas well completion project "Mesa-Marshall #1-2". MESA, founded in 1992, is engaged in the acquisition, exploration and development…

Cross Campus

With over 500 members and operating 80,000 square feet by summer 2016, Cross Campus is one of the country’s top ten shared, collaborative office or "coworking" operators in the US.…