Oil jumps on supply concerns

The price of Brent rose by around 6% this week, reflecting concerns about the negative impact of US sanctions on Iran’s production. The mid-week trade talks between the US and China were inconclusive but expectations were low going into the talks and the market reaction was subdued. Meanwhile, some of the biggest falls were in grains and soybeans as markets continue to factor in lower demand for US exports. Turning to next week, there is little in the way of market moving data at least until Friday when China will release official PMI data for August. Industrial metals prices, in particular, could fall if it is another weak reading. In contrast, we could see further gains in the price of oil in the coming days if rumours of significantly lower Iranian export volumes persist.