Sign Up for FREE Daily Energy News
  • Stay Connected
  • linkedin
  • twitter
  • facebook
  • youtube2

Copper Tip Energy Services
Vista Projects
Copper Tip Energy
Vista Projects

Crude End Week Near $70 With Traders on Edge Ahead of Iran Deal Decision

These translations are done via Google Translate
May 4, 2018 by Jessica Summers


Oil futures in New York zeroed in on $70 a barrel as traders brace for a re-imposition of U.S. sanctions on Iran.

Prices jumped 1.9 percent on Friday to close at the highest level since November 2014. Even though U.S. President Donald Trump has yet to announce whether he’ll pull out of the 2015 Iranian nuclear deal as a May 12 deadline nears, American officials already are positioning for post-accord negotiations. New sanctions could disrupt crude exports from OPEC’s third-largest producer. A rally in equities also pulled oil higher.

“It’s a psychological level,” said Michael Wittner, the head of commodities research at Societe Generale SA in New York. “Geopolitics has been a very key driver in the market and it’s continuing.”

Crude has rallied about 15 percent so far this year as OPEC and allied producers crimp a global glut and geopolitical risks multiplied in the Mideast region that’s home to almost half the world’s oil.

“The market might be weighing the possibility of Trump not extending, which doesn’t change supply-demand balances by itself,” said Michael Loewen, a commodities strategist at Scotiabank in Toronto. “But if new sanctions are created and the U.S. pressures EU nations to follow suit, then the market could be looking much different in a few short months.”

ROO.AI Oil and Gas Field Service Software

West Texas Intermediate crude for June delivery advanced $1.29 to settle at $69.72 a barrel on the New York Mercantile Exchange, after trading just 3 cents below the $70 mark. Total volume traded was about 1 percent below the 100-day average. Prices are up 2.4 percent this week.

Brent crude for July settlement climbed $1.25 to end the session at $74.87 on the London-based ICE Futures Europe exchange. The global benchmark crude was at a $5.29 premium to July WTI.

“It’s back to what’s been haunting the market and is going to continue as we move a day closer to May 12,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund. “The geopolitical jitters are just infecting the market.”

In the U.S., record crude production has been a headwind on the price rally. A dearth of pipeline capacity in the biggest American oil field — Permian Basin of West Texas and New Mexico — has crushed local prices: some grades of West Texas crude are selling for almost $14 a barrel less than the U.S. benchmark, the steepest discount since July 2014.

Other oil-market news:

Gasoline futures rose 1.3 percent to settle at $2.1140 a gallon on Friday. The European Union may announce a settlement with Gazprom PJSC as soon as this month that would see the gas giant enter binding pledges to put an end to a seven-year-old antitrust investigation, according to people familiar with the matter. French energy giant Total SA plans to boost oil exploration and open more fuel stations in South Africa.

Share This:

More News Articles