October has been a rollercoaster month for crude oil, with prices soaring to four-year highs and then tumbling back down again.
With Iran oil sanctions just over two weeks away, the wild ride may not be over yet.
WTI was up 84 cents to trade at $69 a barrel in mid-day trading Friday while Brent prices were up 87 cents to trade at $80 a barrel.
Yesterday, WTI prices fell to $68, a five-week low.
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To put that in perspective, that’s down $8, or 11 percent, from the high point in early October.
Brent prices fell to $78 Thursday, also down $8 a barrel or 9 percent, from the four-year high of $86 on Oct. 3.
Crude supplies have risen 22.3 million barrels over the last four weeks, the largest increase since 2015 when prices took a nosedive.
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Also, the International Energy Agency lowered demand for crude oil based on a weaker economic outlook. And, the sell-off madness last week caused investors to dump risky assets, including crude oil stocks.
On Nov. 4, countries will be prohibited from buying Iranian crude oil as U.S. sanctions go into effect.
“When those sanctions kick in in early November that’s really when we’ll see those exports really dropping off,” said Matt Smith, director of commodity research at ClipperData. “That’s why we get ahead of ourselves really in terms of pricing in that fear.”
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Tensions are escalating with Saudi Arabia as Turkish intelligence implicates more members of Crown Prince Mohammed bin Salman’s inner circle in the disappearance of journalist Jamal Kashoggi.
Trump said the journalist is mostly likely dead and Turkish officials say he was brutally interrogated and dismembered at the Saudi consulate in Istanbul.
Trump again promised “very severe” punishment for those responsible for killing the Washington Post columnist but he hasn’t offered details.
Saudi Arabia is the world’s second biggest oil producer and, before the Khashoggi crisis, there was talk that they would increase production.
“Despite the markets short-term bearish joy with a one-off surge in U.S. oil supply, the reality is that the world is counting on Saudi oil production to replace lost barrels from Iran and Venezuela,” Price Futures Group’s senior analyst Phil Flynn said in a note.
The U.S. rig count is down 10 from the previous week, RigData Insights reported on Friday. There are 1,130 rigs working in the United States.