28 Mar 2024
Thursday 26 April 2018 - 15:25
Story Code : 302589

Oil holds near $68 as Iran speculation counters stockpile gain

Bloomberg- Oil held near $68 a barrel as President Donald Trumps potential exit from the Iran nuclear deal increased concern over Middle East supplies, overshadowing expanding U.S. crude output and stockpiles.

Futures were little changed in New York after climbing 0.5 percent Wednesday. French President Emmanuel Macron predicted Trump willpull outof the Iran accord. A revival of sanctions is expected to cut oil exports from the third-largest OPEC producer. Meanwhile, investors largely shrugged off a government report showing record American crude production and a surprise build in nationwide inventories.




Crude rallied to a three-year high this month as geopolitical tensions in the energy-rich Middle East persist, with Trump set to decide whether to reimpose sanctions on Iran on May 12. While the Organization of Petroleum Exporting Countries issucceedingin curtailing a global glut, the specter of surging U.S. output, which has topped 10 million barrels a day every week since early February, continues to counteract the groups efforts.

It now seems likely that Trump will dump the deal in order to start new negotiations with a clean slate, said Bjarne Schieldrop, chief commodities analyst at SEB AB.

West Texas Intermediate crude for June delivery traded at $68.14 on the New York Mercantile Exchange, up 19 cents, at 9:53 a.m. in London. The contract climbed 35 cents to $68.05 on Wednesday. Total volume traded was about 18 percent below the 100-day average.

Brent crude for June delivery rose 24 cents, or 0.3 percent, to $74.24 a barrel on the London-based ICE Futures Europe exchange. Prices on Wednesday added 0.2 percent to $74. The global benchmark crude traded at a $6.12 premium to WTI.

Futures for September delivery slipped 0.9 percent to 439.4 yuan a barrel on the Shanghai International Energy Exchange. The contract retreated 2.1 percent Wednesday, the biggest decline since April 3.

A U.S. withdrawal from the Iran deal isnt supported by any of the other five countries that are part of the agreement. It would lead to a period of increased tensions and uncertainty, Macron said. His comments came a day after he proposed additional agreements that would try to address many of Trumps concerns. Irans current production is about 1 million barrels a day higher than during the last period of sanctions from 2012 to 2015.

In the U.S., the Energy Information Administration reported crude stockpiles rose 2.17 million barrels last week, in contrast to a forecast for a 2.2 million-barrel decline. The nations oil production expanded for nine consecutive weeks to 10.6 million barrels a day, the highest level in the EIAs weekly data compiled since 1983.
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