The guessing game begins: With exactly two weeks to the expiration of the U.S. sanction waivers on Iran, oil bulls are holding tight to see which way President Donald Trump will lean.
Thursday's action in crude was as exciting as watching paint dry. With many market participants already away early for the Good Friday break, those remaining did little more than move the West Texas Intermediate and Brent benchmarks back and forth by a few cents while musing whether Saudi Arabia will announce a suspension or ease in production cuts just before the May 2 decision on Iran.
New York-traded WTI was down 7 cents, or 0.1%, at 63.69 per barrel by 12:50 PM ET (16:50 GMT).
London-tradedBrent rose by 8 cents, or 0.1%, to $71.70.
For the week, WTI was up 0.1% while Brent rose 1.2%. Year-to-date, the U.S. benchmark showed a gain of 40% against a 33% rise for its U.K. peer.
"The oil trade is still looking for a sign from the Trump administration as to whether they will look to extend waivers to buyers of Iranian oil," said Phil Flynn, senior energy analyst at the Price Futures Group in Chicago.
"Will he, or won’t he?" Flynn asked, referring to Trump.
Analysts say the more the concessions the Saudis make on production cuts, the less inclined Trump will be to give waivers to importers of Iranian oil.
Riyadh and Washington have a decades-long history of cooperating in curbing Iran's rise as a Middle East power. They also have other motivations for acting against Tehran.
For the Saudi, it is decades of enmity with a country that ironically counts as one of the most important members of the OPEC cartel that both belong to.
For Trump, it will be an extension of his mission to punish the Rouhani regime which he accuses of evil terror deeds and of getting an undeserved deal from his predecessor Barack Obama to export its oil in return for what he deemed too liberal curbs on its nuclear program.
While Trump has kept up with his anti-Iran rhetoric in his 2-1/2 years in office, he is also aware that wiping out Tehran's oil from the market will only exacerbate a supply shortage caused by sanctions that Washington also has on Venezuelan oil, and production outages in Libya brought on by a civil war.
Running contrary to Iran's sanctions game, is also Trump's need to keep U.S. motor fuel prices low so as not to affect his chances for reelection in 2020. Pump prices of gasoline nationally have risen by around 25% this year to around $2.84 a gallon, according to AAA. The average price of gasoline is over $4 a gallon in California.
