Crude Oil Prices Settle Lower as Bets on New US Sanctions Against Iran Fall

Investing.com – Crude oil prices settled sharply lower on Tuesday as Trump hinted that the U.S. and France were nearing an agreement to preserve the Iran nuclear deal.

On the New York Mercantile Exchange for June delivery fell 1.4% to settle at $67.70 a barrel, while on London’s Intercontinental Exchange, fell 1.11% to trade at $73.88 a barrel.

French President Emmanuel Macron proposed that the agreement to keep the Iranian nuclear deal alive should block Iranian nuclear activity through 2025, end the country’s ballistic missile program and limit Iran’s influence in the Middle East, Bloomberg reported.

That forced some traders to abandon their bullish bets on new U.S. sanctions against Iran limiting the country’s oil output, extending the rally in oil prices.

Yet, underlying sentiment on oil prices remained positive amid ongoing investor expectations that OPEC cuts would continue to rid the market of excess supplies, which stood at just 12 million barrels above the five-year average, Reuters reported last week.

In November 2016, OPEC and other producers, including Russia agreed to cut output by 1.8 million barrels per day (bpd) to slash global inventories to the five year-average. The OPEC-led deal was renewed last year through 2018.

OPEC will meet in June to decide whether to extend the production-cut agreement.

Also limiting losses in crude oil prices were expectations for a second-straight weekly drop in U.S. crude supplies amid renewed refinery activity.

The U.S. Energy Information Administration at 10:30 EDT on Wednesday is expected to show U.S. crude stockpiles fell by 2.043 million barrels.

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