Oil rises more than 3% to 6-month high on global supply concerns

Crude oil futures rose during the Asian session as Nymex crude rose to its highest since the end of October, in addition to Brent rising to its highest since November, amid negative stability of the US dollar index, in line with the inverse relationship between them, on the threshold of developments and economic data release expected on Monday by the US economy, the largest producer and consumer of oil in the world, and the markets' assessment for the possibility of the US State Department announcing to stop granting waivers to countries that import Iranian oil by the beginning of next month.

At 3:06 GMT, Nymex crude futures (for May 15th delivery) rose 3.02% to trade at $65.93 per barrel, compared to the opening at $64.07 a barrel. Brent crude futures (for June 15th delivery) rose 3.21% to trade at $74.26 per barrel compared to the opening at $72.05 per barrel, while the US dollar index fell 0.01% to 97.37 compared to the opening at 97.38.

Investors are currently waiting for the US economy to release housing data with the release of the Existing Home Sales Index, which may reflect a decline by 3.7% to reach a total of 5.31 million homes, versus 11.8% at 5.51 million homes in February. Otherwise, markets are also waiting for the Initial US GDP reading for the first quarter by the end of this week.

In contrast, the Washington Post reported that US Secretary of State Mike Pompeo would later announce that as of May 2nd, the State Department will no longer grant waivers to its economic sanctions to any country that imports Iranian crude or condensate after that date. As the United States has implemented those economic sanctions on Iranian oil exports after President Trump has withdrawn his country unilaterally of the 2015 nuclear agreement with Iran.

In another context, the Libyan capital, Tripoli, have suffered a series of air raids and bombings over the weekend, which also boosted the performance of oil prices with concern about the supplies on one of the main oil producers of OPEC, led by the Libyan military commander Khalifa Hafer forces in East of the country, to head for the country's capital, which is under the control of the United Nations recognized government.

We also followed over the weekend a disrupt in major pipeline in Nigeria, one of the oil-exporting countries, which resulted in Nymex crude achieving weekly gains for the eighth week in a row, its longest weekly rally since the second quarter of 2015, and Brent crude achieving weekly gains for the fifth consecutive week, marking its longest weekly gain since the last quarter of 2017.

The official data we followed earlier this week by Saudi Arabia, the world's third-largest oil producer, and OPEC's largest oil producer, showed that the Kingdom's exports dropped to 6,977 million barrels a day in February. Compared to 7,254,000 barrels per day in January, which is also one of the factors that boosted the markets' concern about the oil supply.

According to the weekly report of Baker Hughes, which was unveiled last Thursday due to the closure of the US market on the "Good Friday" holiday, showed that the number of crude drilling rigs and platforms fell in America by about eight platforms to a total of 825 platforms during the week ended in April 19, while the US oil production levels have recently stabilized at a record high of 12.1 million bpd.