Oil edges up as Israel sets announcement on Iran deal

Fredrick Soto
May 2, 2018

The prospect of the United States reimposing sanctions on Iran and OPEC's continued discipline in withholding output have kept the market well above $70 a barrel for most of this month. The S&P Global Platts survey forecast a supply decline of 500,000 barrels for gasoline, while distillates stockpiles were expected to be unchanged.

Brent was on track for a weekly gain of about 1 percent, while WTI was set for a weekly loss of about 0.3 percent. Prices climbed as high as $75.47 last week, levels not seen since November, 2014.

Exxon Mobil (XOM) fell 0.7% in the stock market today.

Brent crude futures were up 31 cents at $74.95 a barrel by 12:17 p.m. EDT (1617 GMT).

Price increases have been capped by rising USA production as shale drillers ramp up activity, underpinning a widening discount between Brent and WTI.

Oil prices edged lower on Monday as a rising rig count in the United States pointed to higher production, but prices held near more than three-year highs and were on track to rise for a second consecutive month.

Meanwhile, Brent prices have gained almost 6 percent this month, buoyed by expectations the United States will renew sanctions against Iran.

The decision of whether to restore the sanctions on Iran that were lifted after an agreement over its disputed nuclear program will be made by US President Donald Trump on May 12. Prices are up 5.2% for the month. The gains came despite a higher dollar, which hit its strongest since January 11 against a basket of currencies. The global benchmark crude traded at a US$6.43 premium to June WTI.

The recent Dollars strength has negatively impacted Gold as the intensity of the USD correction caught most traders by surprise.

On Friday, the Baker Hughes rig count in the U.S. showed a gain of five rigs in the week to April 27, the fourth consecutive weekly rise, bringing the total rig count to 825. "Since the market is already tight because of the high production outages in Venezuela and the production cuts implemented by OPEC and Russian Federation, any further reduction of supply weighs all the more heavily", the bank said. However, a bigger than expected jump in US inventories sent crude oil futures...

Oil fell earlier in the day after a weekly report showed USA drillers added five oil rigs in the week to April 27, bringing the total count to 825, the highest since March 2015, General Electric's Baker Hughes energy services firm said.

According to the its April commodity markets outlook, oil prices will average $65 a barrel through 2018, 22% higher than the average price of $53 in 2017, due to the combined effect of production cut by the Organisation of the Petroleum Exporting Countries, OPEC, and its allies led Russian Federation, and an increase in demand for the products.

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