28 October 2018, News Wires — Oil prices were little changed on Friday, supported by expectations that sanctions on Iran would tighten supplies, but prices were headed for a weekly drop as a slump in stock markets and concerns about trade wars clouded the fuel demand outlook.
Brent crude futures rose 28 cents to $77.17 a barrel by 11:11 a.m. EDT (1511 GMT). The global benchmark is on course for a weekly loss of about 3.2 percent and is down about $10 in three weeks.
U.S. West Texas Intermediate (WTI) crude CLc1 futures fell 10 cents to $67.23 a barrel. It was on track for a weekly loss of about 2.7 percent.
Supporting prices on Friday, Iraq will stop trucking crude oil from its northern Kirkuk oil field to Iran in November to comply with U.S. sanctions, two sources familiar with Iraqi oil export operations said on Friday.
“The market has to wake up to the fact that Iranian sanctions are happening Nov. 4. That’s just a couple weeks away,” said Phil Flynn, an oil market analyst at Price Futures Group in Chicago.
The market for months has weighed concern surrounding potential supply shortages from U.S. sanctions on Iran, due to come into force Nov. 4. Washington has said it wants to reduce Iranian oil sales to zero, although this looks unlikely.
Many buyers, including Iran’s biggest customer, China, appear to be falling in line, forcing Tehran to store unsold oil on tankers in the hope it can sell the crude once sanctions are lifted.
However, a global collapse in equities has roiled oil markets this week. The Nasdaq Composite IXIC confirmed a correction this week, while the S&P 500 and the Dow Jones Industrial Average erased their gains for the year.
Financial markets have been hit hard by a range of worries, including the U.S.-China trade war, a rout in emerging market currencies, rising borrowing costs and bond yields, and economic concerns in Italy.
There are also signs of a slowdown in global trade, with container and bulk freight rates dropping after rising for most of 2018.
Meanwhile, Saudi Arabia’s OPEC governor said on Thursday oil markets could face oversupply by the end of the year.
“The market in the fourth quarter could be shifting towards an oversupply situation as evidenced by rising inventories over the past few weeks,” Adeeb Al-Aama told Reuters.