Oil futures traded on a mixed note in Thursday dealings, though were on track to post gains for the week as well as the month.
U.S. prices were modestly higher, a day after the U.S. government reported across-the-board declines in domestic petroleum supplies, but global benchmark crude prices moved slightly lower, with nervousness over the potential return of Iranian crude supply keeping a lid on the market.
“Oil prices are in a funk as the market is trying to adjust to the possibility of Iranian oil supply,” said Phil Flynn, senior market analyst at The Price Futures Group, in a daily report. “Yet we think we are just consolidating before getting ready for a $70.00 test.”
West Texas Intermediate crude for July delivery
rose 10 cents, or nearly 0.2%, to $66.31 a barrel on the New York Mercantile Exchange.
which becomes the front month after Friday’s session, traded at $68.72, down a penny.
Crude remains stuck in a trading range this week, with support tied to signs of good demand ahead of the kickoff of the U.S. summer driving season this weekend.
At 9.5 million barrels a day, U.S. gasoline demand is only a shade below the usual level for this time of year, said Eugen Weinberg, analyst at Commerzbank, in a note.
Data from the Energy Information Administration released Wednesday weekly declines for domestic crude, gasoline and distillate supplies.
But upside for oil has been limited by jitters over the potential return of Iranian supply as indirect talks resume aimed at reviving the 2015 Iran nuclear deal after the last round of negotiations saw progress.
For the market, “the nuclear agreement with and the U.S. sanctions against Iran will continue to tip the scales, as they will determine whether Iranian oil exports return to the market,” Weinberg wrote.
Also on Nymex, natural-gas futures lost more ground after the EIA on Thursday said U.S. supplies of natural gas rose by 115 billion cubic feet for the week ended May 21. That was a bit larger than the average increase of 107 billion cubic feet forecast by analysts polled by S&P Global Platts.
July natural gas
fell 2.8% to $2.94 per million British thermal units. Prices were trading above $3 shortly before the supply data.