Futures Movers: Oil set for 4th straight gain as investors watch Iranian sanctions

Futures Movers: Oil set for 4th straight gain as investors watch Iranian sanctions

Oil futures on Tuesday traded modestly higher, with a fourth straight gain on track as investors watched U.S. sanctions against Iran for the potential to disrupt global supplies.

West Texas Intermediate crude for September delivery CLV8, +0.38% on the New York Mercantile Exchange, which expires at the end of trading Tuesday, was up 60 cents, or 0.9%, at $67.03 a barrel, while those for the soon-to-be most-active contract October WTI CLV8, +0.38% were up 13 cents, or 0.2%, at $65.55 a barrel.

Market participants have said the price spread between the September and October contracts would be a focus by traders, perhaps, setting the stage for some volatility in WTI as it unwinds.

“The September/October spread is trading +1.49 and has traded as wide as +1.59 earlier in the session. This is going to be an ugly expiration, though it might be a bit of a challenge to surpass the August expiration,” wrote Robert Yawger, director of energy at Mizuho USA.

October Brent crude LCOX8, +0.44% the global benchmark, climbed 23 cents, or 0.3%, to $72.44 a barrel on the ICE Futures Europe exchange.

Both the global and U.S. benchmarks were set to post a fourth straight gain. A four-day rise for WTI would match its longest rally since a similar advance ended July 20, while Brent is on tract to put in its longest stretch gains since a six-day advanced ended July 26, according to FactSet data.

U.S. sanctions on Iran specifically targeting oil are due to come into force in November, and analysts said it remains unclear exactly what volume of Iranian oil would be removed from the market. President Donald Trump in May pulled the U.S. out of a 2015 international agreement to curb Iran’s nuclear program. Some other sanctions took effect this month.

Industry experts estimate that the impact of lost Iran oil on the market would amount to 1 million to 1.5 million barrels a day. Europe, Japan, South Korea and India are anticipated to cut their Iranian imports.

Turkey and China, which are both embroiled in political and trade clashes with the U.S., are harder to factor. Turkey is a major conduit for oil in the Middle East while China is one of the world’s biggest importers of crude.

On Monday, Iranian Oil Minister Bijan Zanganeh said France’s Total TOT, +0.98%  has left a natural-gas project in Iran’s South Pars field.

Separately, investors are paying attention to fraught negotiations between Beijing and Washington to end their protracted tariff clash, which market participants fear could roil global markets and accelerate an economic slowdown in China—bearish factors for oil demand should they manifest. Talks between the U.S. and China set to resume on Wednesday, but President Trump has said in a Reuters interview that he has low expectations for a resolution. The U.S. is scheduled to implement some additional tariffs on Chinese goods on Thursday.

Looking ahead, energy investors will be on the look out for weekly inventory data from the American Petroleum Institute later Tuesday.

Elsewhere on Nymex, September natural gas NGU18, +1.33% rose 3 cents, or 1.1% at $2.972 per million British thermal units. September gasoline RBU8, +0.69% added a penny, or 0.6%, to reach $2.026 a gallon and September heating oil HOU8, +0.63% tacked on 0.4% to $2.121 a gallon.

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