Crude jumped the most in more than a month as concern that a key Canadian facility won’t return to full production as quickly as expected joined a glut of supply concerns globally.
Futures in New York advanced 2.1% in New York on Monday amid concerns that supplies from Suncor Energy Inc.’s Syncrude facility may be crimped further. Threats elsewhere included an imminent labor strike in North Sea oil fields and Saudi Arabia’s suspension of shipments through a key Red Sea transit route.
“Each incremental noise point is going to have a little bit of an off-setting impact,” said Matthew Beck, managing director of an $8 billion portfolio at John Hancock Financial Services Inc. in Boston. Together, they have “alleviated some folks’ concerns over just continuing increasing supply beyond demand needs,” he said.
Although trade tensions between the US and China pushed oil lower for much of this month, Barclays Plc warned of “ significant upside risk” for prices in the fourth quarter as sanctions begin to bite Iranian exports. The bank estimated U.S. measures against the Islamic Republic will crimp Iranian exports by about 700,000 barrels a day.
The dollar weakened ahead of crucial meetings by central bankers later this week, boosting the appeal of commodities priced in the U.S. currency.
West Texas Intermediate crude for September delivery rose $1.44 to settle at $70.13 a barrel on the New York Mercantile Exchange. Total volume traded was about 43% below the 100-day average.
Brent for September settlement added 68 cents to end the session at $74.97 a barrel on the London-based ICE Futures Europe exchange. The global benchmark traded at a $4.84 premium to WTI.
The Bloomberg Dollar Spot Index dropped as much as 0.3%.
Suncor Energy lowered the top end of its full-year production range as it works to bring the Syncrude oil-sands facility back online after a power outage brought the 350,000-barrel-a-day plant down last month. Output this year will be 740,000 to 750,000 barrels of oil equivalent a day, the Calgary-based company said last week. — Bloomberg