Iran has come out against higher prices, after a rally of over 12% this year on output cuts by the
Organisation of Petroleum Exporting Countries and its allies as well as
rising geopolitical risks in the Middle East.
Crude at $60 to $65 a
barrel is “suitable”, an
official from the OPEC producer said on Sunday, signaling a split with
fellow group member Saudi Arabia that’s said to be aiming for $80 oil.
The cartel will meet next month in Vienna.
“Fresh sanctions, which would remove some of Iran’s crude supplies
from the global market, will tighten the balance between demand and
supply and support crude prices,”
Takayuki Nogami, chief economist at state-backed Japan Oil, Gas &
Metals National Corp, said by phone from Tokyo. “While there could be
profit-taking given current oil prices, it will be limited as concerns
over Iran are rising.”
West Texas Intermediate oil for June delivery climbed as much as 97
cents to $70.69 a barrel on the New York Mercantile Exchange, and traded
at $70.47 at 11.22am in Singapore. Total
volume traded was about 29% above the 100-day average. Prices
rose 2.4% last week.
Brent for July settlement rose 91 cents to $75.78 a barrel on the
London-based ICE Futures Europe exchange. Prices climbed 0.3%
last week. The global benchmark crude, which is at the highest level
since November 2014, was at a $5.43
premium to July WTI.
Yuan-denominated futures for September delivery rose 3% to
460.3 yuan per barrel on the Shanghai International Energy Exchange. The
contract climbed 0.6% last week.
While refusing to reveal what he’ll do by May 12, Trump repeated his
belief the existing accord is “a horrible agreement for the United
States”. But, he added, “That doesn’t mean I wouldn’t negotiate a new
agreement.” Meanwhile, America’s European allies continue to back the
deal, saying it has been essential to reining in Iran’s nuclear programme.
Iran prepares
Iran has been preparing for months for the possibility that Trump will pull out of the nuclear agreement, President
Hassan Rouhani said,
warning that the US would quickly come to regret such a decision. The constant fluctuation in oil prices is
destabilising for future investment and security of supply, Iranian Oil Minister
Bijan Namdar Zanganeh said.
Energy market consultant FGE has said that sanctions on Iran could cut its
output by up to 500 000 barrels a day by the end of this year. Since sanctions were eased as of January 2016, Iran’s crude
production has almost doubled, while exports soared to record levels last month.
In other oil-market news, money managers
curbed their enthusiasm for oil just before the US benchmark price
surged, with total wagers on WTI sliding to the lowest since early
January.
The US oil rig count
rose by 9 to 834, the fifth straight weekly increase, according to Baker
Hughes data.
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