Oil prices steady but supported by Iran concerns

Oil prices steady but supported by Iran concerns

Oil prices steady but supported by Iran concerns

"Oil prices have more than doubled since bottoming in early 2016, as the large overhang of inventories has been reduced significantly", said John Baffes, Senior Economist and lead author of the Commodity Markets Outlook.

Trump has until May 12 to decide whether to restore sanctions on Iran that were lifted after the global agreement.

Brent crude futures, the global benchmark, dipped 39 cents, or 0.5 per cent, to $74.25 a barrel.

"That's an issue that is more political in nature that could have a shock in the market", said Mark Watkins, a regional investment manager at U.S. Bank Wealth Management in Park City, Utah". "I expect the market to have a good finish for the week given the uncertainty around the Iran deal", Baruch said.

If the United States does reimpose sanctions, that would be bullish for oil prices, analysts say, coinciding with a rapid decline in OPEC production largely due to declines in Angola and Venezuela, which is in the midst of an economic and social crisis.

Growing U.S. crude production and stockpiles have weighed on the market.

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U.S. West Texas Intermediate crude for June delivery was 87 cents down at $67.70 a barrel, after settling 47 cents higher on Monday. The price rose to $75.47 last week, the highest since November 2014.

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

Money managers hold record positions in Brent crude futures and options, lured in by the hefty premium of the front-month June contract over subsequent months that makes it profitable to invest in crude over the longer term.

Oil fell earlier in the day after a weekly report showed United States 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.

Angola, once Africa's biggest crude producer, is suffering sharp declines at under-invested offshore fields, with output dropping nearly three times as much as the nation pledged in an accord with fellow Opec members. US crude stockpiles probably increased by 1.25 million barrels, according to the median estimate of analysts surveyed by Bloomberg.

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. At the same time, OPEC's production cuts have continued to tighten global markets, despite USA crude output hitting fresh records and the number of rigs reaching the highest levels since 2015.

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