New York — Oil prices rose in mid-morning US trading as bearish sentiment faded amid rising US equity markets and lingering geopolitical tensions.
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ICE December Brent was up $1.33 at $80.62/b and NYMEX November WTI was up 99 cents at $69.64/b.
Crude futures were already in positive territory in European trading with ICE Brent testing the $80/b mark ahead of the US open. But crude prices strengthened decisively after US equity markets opened higher.
The NASDAQ Composite Index was up more than 1% from Thursday's close in the first hour of trading.
NYMEX November ULSD was up 2.82 cents at $2.3231/gal and NYMEX November RBOB was 3.70 cents higher at $1.9281/gal.
A large US stock build last week pressured prices in recent days. But Friday's gains suggested lingering concerns over tighter supply due to falling oil exports from Iran and declining production in Venezuela were offsetting the US stock build.
"Despite the markets short-term bearish joy with a one-off surge in US 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 senior market analyst Phil Flynn said in a note.
Saudi crude production has since risen to about 10.7 million b/d and would go even higher in November, energy minister Khalid al-Falih has said in recent days, as the kingdom seeks to allay market fears of a supply squeeze when US sanctions on Iran snap back on November 5.
But a diplomatic row between the US and Saudi Arabia over the disappearance of journalist Jamal Khashoggi has brought those assurances under scrutiny this week. Tensions have ebbed and flowed week as actors on both sides have navigated around what appeared to be increasingly clear evidence that Khashoggi was murdered in the Saudi consulate in Ankara, Turkey.
On Thursday, US President Donald Trump said he believed Khashoggi was dead and, while stopping short of accusing the Saudis of any involvement, reiterated his position that the Kingdom would face "severe consequences" if it was proven to have had a hand in the journalist's murder.
Saudi Arabia has denied any involvement in Khashoggi's disappearance.
Gathering headwinds for US crude production has underscored the importance of Saudi production to keeping the global oil market balanced post-sanctions.
This week, combined oil and gas rig counts in the US fell by 10 to a five-week low of 1,161 amid further declines in the Permian Basin. Permian operators have been limited by takeaway constraints expected to linger well into 2019.
--Chris van Moessner, firstname.lastname@example.org
--Edited by Dan Lalor, email@example.com