Oil prices jumped higher on Friday in response to the prospect of a fresh round of US sanctions against Iran after its test launch of a ballistic missile.
Brent crude futures were up 43 cents at $56.99 a barrel by 1515 GMT, having lost 24 cents in the previous session. Brent was on track for a more than 2 percent gain on the week, its first significant weekly rise this year.
Front month US West Texas Intermediate (WTI) crude futures climbed 37 cents to $53.91, after closing 34 cents down on Thursday. The contract is up by nearly 1 percent on the week.
US President Donald Trump had warned on Twitter that “Iran is playing with fire” after its missile test, and the US Treasury said on Friday that it would announce new sanctions on Iran, including individuals and entities based in the United Arab Emirates (UAE), Lebanon and China.
“The ‘trumperament’ of the new US president is being tested by Iran and soon maybe also by Russia and China,” said Olivier Jakob, managing director of consultancy PetroMatrix. “And that is adding some geopolitical support to crude oil.”
The sanctions announcement added to volatility in what had already been a day of choppy trading. Analysts said the market is torn between promised cuts from the Organization of the Petroleum Exporting Countries (OPEC) and fears over rising US shale oil production.
Earlier in the afternoon the oil contracts gave up gains and briefly turned negative on US jobs data.
Hans van Cleef, senior energy economist with ABN Amro, said there could be more choppy trading after Baker Hughes releases US rig count data later in the day, giving an indication on future US production. The prospect of more oil output from Nigeria and other non-OPEC producers such as Brazil also looms.
“Record speculative length threatens to trigger a sharp price fall as unease builds,” Commerzbank said in a note. 
Gold pares losses
Gold steadied on Friday, erasing earlier losses as the dollar came under pressure from a US payrolls report that flagged up weak wage growth last month, weakening the case for near-term interest rate hikes.
The dollar fell versus the euro and US Treasury yields eased after the jobs report for January. 
Spot gold was at $1,215.80 an ounce at 1425 GMT, little changed from late on Thursday but off an earlier low of $1,207.10. US gold futures for April delivery were 0.2 percent lower at $1,217.10. “Markets seem to be looking at the soft wage data, which signal rather weak inflationary pressure, and therefore less need for the Fed to raise interest rates,” Carsten Fritsch, analyst at Commerzbank told the Reuters Global Gold Forum in the wake of the report. 
“The US dollar is weakening, bond yields decline, so the reaction of gold prices totally makes sense,” he said.
Gold is on track to rise 2.1 percent this week, its biggest weekly increase since early November, as the dollar headed for a fourth weekly drop on worries about Trump’s presidential style and a lack of clarity on rate hikes. The precious metal hit its highest since Nov. 17 on Thursday at $1,225.30 an ounce after a Federal Reserve policy statement disappointed investors hoping for clearer signs on interest rate hikes, knocking the dollar to a 12-week low.

Source: Arab News