From Bloomberg

Oil headed for its best quarter in almost 10 years as the OPEC+ coalition’s production cuts and the loss of barrels due to U.S. sanctions on Iran and Venezuela countered a wobbly demand outlook.

Futures rose as much as 2.4 percent in New York on Friday, rallying with equities after Federal Reserve Bank of New York President John Williams downplayed the chances of a recession in the world’s largest economy. The market also shrugged off a complaint by U.S. President Donald Trump that oil prices were “getting too high”, while Russian output was said to have dropped further in March.

Oil has clawed back most of its losses from the final quarter of 2018 as Saudi Arabia leads the Organization of the Petroleum Exporting Countries and its allies in squeezing supplies to prevent a glut. Whether the U.S. will extend waivers allowing some countries to keep buying Iranian oil is shaping up as a key supply risk, while slowing global economic growth is capping further gains.

“The energy complex has put in a stellar price performance in the first three months of this year,” PVM Oil Associates analyst Stephen Brennock wrote in a report. “The fundamental backdrop is poised to tighten in the coming quarter.”

West Texas Intermediate for May delivery rose $1.32, or 2.2 percent, to $60.62 a barrel on the New York Mercantile Exchange as of 9:12 a.m. local time. The contract is up 2.5 percent for the week and 33 percent this quarter, on course for the biggest quarterly gain since June 2009.

Brent for May settlement, which expires Friday, climbed 1.4 percent to $68.74 a barrel on the London-based ICE Futures Europe exchange. It’s risen 28 percent this quarter, also the most since June 2009. The global benchmark crude was at a premium of $8.23 to WTI.

Trade Talks

New York Fed chief Williams’ comments boosted sentiment as the U.S. and China resumed trade talks. The Trump administration is prepared to keep negotiating for weeks or even months to reach a deal that will ensure China improves market access and intellectual-property policies for U.S. companies, White House economic adviser Larry Kudlow said in a speech in Washington.

A lack of clarity on the Iran waiver extensions is generating uncertainty on the supply side. While South Korea requested “maximum flexibility” in renewing the waivers that lapse in early May, the U.S. has reaffirmed its original stance to further strengthen pressure and sanctions against the Persian Gulf nation. Refiners in Japan, which resumed oil purchases from Iran in February, are still not certain about buying crude from there after next month.

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