Oil price rebounds to $56.83/barrel as US announces sanctions on Iran

Oil prices, at the weekend saw a rebound after the United States announced sanctions related to Iran’s ballistic missile test, and on signs big oil producers are cutting output.

Brent crude futures were up 27 cents at $56.83 a barrel by 1:07 p.m. ET (1807 GMT). Brent was on track to gain more than 2 percent on the week, its first significant weekly rise this year.

Front month U.S. West Texas Intermediate crude futures climbed 24 cents to $53.78 a barrel. For the week, the contract is up about 1 percent.

Prices held their gains after oilfield services firm Baker Hughes reported U.S. drillers added 17 oil rigs in the last week. The count has been recovering since June and now stands at 583 rigs, compared with 467 rigs last year.

Prices briefly pared gains after the official start of the day session, reflecting pent-up selling pressure following the U.S. jobs report for January, according to John Kilduff, founding partner at energy hedge fund Again Capital.

Comments by Russian energy minister Alexander Novak that oil producers had cut their output as agreed under a deal with OPEC, also helped to support prices, analysts said.

Russia’s Novak said that Russian companies might cut oil production more quickly than required by its deal with Organization of the Petroleum Exporting Countries (OPEC) late last year.

He said that 1.4 million barrels per day (bpd) was cut from global oil output last month as part of the deal.