Oil Futures Extend Gains, Rise 1.6%

Oil Futures Extend Gains, Rise 1.6%

Crude oil prices rose sharply on Friday, amid speculation about shortage in supply post implementation of sanctions on Iranian oil from early November.

The U.S. Energy Secretary Rick Perry's remarks on Wednesday that the U.S. will not open up its strategic petroleum reserves or put a cap on prices, aided oil's surge.

With the OPEC members and leading non-OPEC oil producers saying they are in no hurry to increase output to make up for the loss of supply from Iran, concerns about supply have increased.

The meeting of the Organization of the Petroleum Exporting Countries and non-OPEC members including Russia, last weekend, ended with no formal recommendation for any additional supply boost.

Crude oil futures for November delivery ended up $1.13, or 1.6%, at $73.25 a barrel, the highest settlement price in two months.

On Thursday, crude oil futures ended up $0.55, or 0.8%, at $72.12 a barrel. For the week, crude oil futures gained 3.5%

The Energy Information Administration's report on Wednesday showed an unexpected jump in U.S. crude stockpiles last week. The data showed crude stockpiles to have risen by nearly 1.9 million barrels in the week, as against an expected drop of over 2 million barrels. The report also said U.S. crude production hit a record 11.1 million bpd in the week.

According to reports, crude oil shipments from Iran may have dropped to about 1.5 million barrels a day this month. It is expected that oil exports from Iran will drop further when U.S. sanctions take effect on November 4. Iran exported about 2.3 million barrel a day in June.

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