Picture: REUTERS
Picture: REUTERS

London — Oil prices fell on Friday as the market retreated slightly from its strongest bull run in at least a year amid efforts to resume Russian oil flows that were interrupted by contamination.

The US West Texas Intermediate (WTI) benchmark is on track for its eighth successive weekly gain, the longest run since the first half of 2015. Brent crude, meanwhile, is poised for a fifth weekly gain, representing its best run for a year.

Crude futures are up about 40% this year on markets tightened by an oil cartel Opec supply pact, sanctions on Venezuela and Iran, as well as unreliable production in Libya.

Brent crude futures were at $72.97 a barrel at 10.48am GMT, down $1.38. WTI crude futures fell by $1.05 to $64.16.

The dip followed Brent’s rise above $75 a barrel for the first time this year on Thursday after Germany, Poland and Slovakia suspended imports of Russian crude via a major pipeline, citing oil quality. The move cut off parts of Europe from a major supply route, though Russia is holding talks on Friday with Poland, Belarus and Ukraine. It has said it plans to start supplying clean oil via a pipeline on April 29.

“Fears of a supply shock were greatly exaggerated,” PVM analysts said in a note.

Supporting prices, Washington said on Monday that it would end all exemptions for sanctions against Iran. Russian oil company Rosneft, however, does not expect tougher sanctions on Iran to result in a global oil deficit, pointing to US pressure on Saudi Arabia and the United Arab Emirates to make up any shortfall.

“We do not expect further price upside, even if volatility is likely to increase in coming months,” US bank Goldman Sachs said.

Many analysts expect some oil to still seep out of the country.

“About 400,000 to 500,000 barrels per day (bpd) of crude and condensate will continue to be exported,” said energy consultancy FGE, down from about 1-million bpd currently.

China, the world’s biggest buyer of Iranian oil, has formally complained to the US, while Turkey is also lobbying for exemptions. Opec member Iraq has said it could raise its output. Another cap on prices is provided by US crude inventories that rose last week to their highest since October 2017.

Said PVM, “All of this had the makings for a bout of rally fatigue ... Market players await a fresh catalyst to take prices higher.”