Crude oil prices were treading water early Friday after British Prime Minister Theresa May offered assurances of stability following a surprise election outcome.
With less than two weeks to go before divorce negotiations begin with the European Union, May saw her hold on power eroded after snap elections. Facing calls to resign, May took to the podium early Friday to offer assurances about the road ahead.
"This government will guide the country through the crucial Brexit talks that begin in just 10 days, and deliver on the will of the British people by taking the United Kingdom out of the European Union," she said.
Crude oil prices slumped overnight as exit polls showed May's lead evaporating, but moderated in the hour before the start of trading in New York. Stephen Brennock, an analyst with London broker PVM, said that, while the broader market has largely factored Brexit into the equation, May's loss added a "fresh period of uncertainty."
The price for Brent crude oil was down 0.1 percent from the previous close about a half hour before the start of trading on Wall Street to $47.81 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 0.11 percent to $45.59 per barrel.
Markets saw some relief as well in easing risk factors that followed testimony from former FBI Director James Comey, who offered no concrete account on whether U.S. President Donald Trump interfered with investigations into alleged Russian meddling in the country's election last year.
Elsewhere, lingering questions over the unity among members of the Organization of Petroleum Exporting Countries re-emerged Friday when Saudi Arabia and some of its Middle East allies put more pressure on Qatar for allegations of support for terrorist organizations. Several of the parties to an OPEC-led effort to balance the market with managed production declines are involved in the dispute, which could dampen the impact of the plan. This week, credit risks analyst warned the situation for Qatar could also deteriorate if the crisis continues.
"The price outlook for this year has been most recently downgraded as doubts grow that OPEC-led cuts will drain the global oil glut," Brennock added in the emailed newsletter.
Markets could be swayed later in the trading day when oilfield services company Baker Hughes releases weekly rig count data. Rig counts offer a loose gauge of industry confidence in a particular sector, and gains in the United States in particular could add to supply-side concerns given the resiliency of shale oil production to lower crude oil prices.
Nigerian crude oil exports threaten market balance
Oil export operations in Nigeria are back in service following repairs, a division of Royal Dutch Shell said, adding to lingering supply-side concerns.
A spokesperson for the Shell Petroleum Development Company of Nigeria Ltd said the company lifted force majeure, a contractual condition related to circumstances beyond the control of the parties involved, for exports from the Forcados t … read more
