Oil rises on possible Iran sanctions and declining Venezuelan output

Javier Stokes
April 27, 2018

Oil markets are underestimating the impact that a collapse of the Iran nuclear deal - and the re-imposition of US sanctions on Iran - could have on prices, a Middle East strategist told CNBC.

Now, French President Emmanuel Macron has proposed a new deal to offer Trump, but if the US president shuns it, it will be time of more tension and uncertainly, Macron said, as quoted by Bloomberg.

Focus within the oil market remains on whether President Trump will decide to reimpose sanctions on Iran in coming weeks.

The price of oil has risen by about 6 percent in the past month thanks to expectations that the United States could do so.

Oil output in Venezuela, a member of the Organization of the Petroleum Exporting Countries (OPEC), has fallen from nearly 2.5 million barrels per day (bpd) to just around 1.5 million bpd now due to political and economic turmoil in the South American country.

US West Texas Intermediate futures were down 12 cents, or 0.2%, at $67.58 a barrel, also off the late-2014 highs of $69.56 a barrel marked earlier in April.

New York Yankees vs. Minnesota Twins
Aaron Hicks , continuing a theme of damage by ex-Twins on this road trip, followed with a loud single to right to score Sanchez. Austin hit a two-run double in the seventh inning and a two-run home run off center fielder Ryan LaMarre in the eighth inning.

Venezuela's plunging output and looming USA sanctions against Iran come against a backdrop of strong demand, especially in Asia, the world's biggest oil consuming region.

Meanwhile, the USA benchmark crude has averaged around $66 a barrel so far this month and analysts and traders surveyed by Bloomberg are bullish on US futures as OPEC trims output against a backdrop of record American crude output.

The statistical arm of the US Energy Department, the Energy Information Administration, made this known on Wednesday, revealing that the crude oil exports rose by 582,000 barrels per day last week to an all-time record high of 2.331 million barrels per day.

Not all market indicators point towards tighter supplies, however. During the last month crude oil imports averaged over 8.2 million barrels per day, 1.5% more than the same four-week period past year.

A loading programme compiled by Reuters showed that exports of crude from Nigeria averaged 1.61 million bpd.

Still others noted that the US dollar hitting its highest level since mid January did little to damage crude's performance this week: "Oil has had a very good week so far given what the dollar has done", said Bill Baruch, president of Blue Line Futures, adding that "I expect the market to have a good finish for the week given the uncertainty around the Iran deal".

Other reports by

Discuss This Article