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nsucurrent.com May 24, 2018


Oil steady near $71 as sanctions and protests stoke risk

16 May 2018, 12:38 | Colleen Roy

Oil steady near $71 as sanctions and protests stoke risk

Oil steady near $71 as sanctions and protests stoke risk

Oil prices rose as OPEC reported that the global oil glut has been virtually eliminated, while USA crude´s discount to global benchmark Brent widened to more than $7, its deepest in five months.

Increased demand and restricted supply caused oil prices to soar today with Brent crude oil reaching $79 (£58) per barrel which is the highest since November 2014.

The supply is greater in the United States were production has now seen a large increase in production bringing the total of barrels produced per day to 10.7m. "Brent is pricing in the idea that all the risk to supplies is overseas - there's a concern that all the supplies that are tight in Europe are only going to get tighter".

Crude futures hit the highs as the markets anticipated a sharp fall in Iranian crude supply once USA sanctions take effect later this year.

Moreover, in a monthly oil market report released Monday, the Organization of the Petroleum Exporting Countries (OPEC) raised its forecast for global oil demand in 2018, expecting the world to consume 98.85 million barrels a day, or 1.65 million barrels a day higher than a year ago.




Iran will restart its uranium enrichment if it can not find a way to save the 2015 nuclear deal with the European Union after the United States pulled out last week, Tehran's government spokesman said on Tuesday. A lot will depend on how other major oil consumers respond to Washington's action against Tehran, which will take effect in November, Reuters reported. OPEC agreed to slash the output by 1.2 million barrels per day from January 1. As the dollar strengthens, investors can retreat from dollar-denominated commodities like oil.

Elsewhere, supply concerns have been mounting over the last week after President Donald Trump the United States pulled out of the Iran nuclear deal - a move that reimposes sanctions on Iranian barrels. Yesterday, the Energy Information Administration said it expected shale oil production to hit 7.178 million barrels daily next month thanks to a record-high monthly increase of 144,000 bpd.

OPEC's success with the oil production cutting deal has been to a significant extent aided by Venezuela's catastrophically dropping production as the country grapples with foreign exchange shortage, USA sanctions, and a devastating economic crisis.

This story has not been edited by Firstpost staff and is generated by auto-feed.



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