Crude Oil Prices Settle Higher as Prospect of US Sanctions on Iran Heats Up

Investing.com – Crude oil prices settled higher after Iran said it would not renegotiate the Iran nuclear deal, accusing the U.S. of “bullying,” stoking expectations for new U.S. sanctions on Tehran.

On the New York Mercantile Exchange for June delivery rose 50 cents, or 0.74%, to settle at $68.43 a barrel, while on London’s Intercontinental Exchange, rose 0.45% to trade at $73.70 a barrel.

Iranian Foreign Minister Mohammad Javad Zarif accused the U.S. of “bullying,” and insisted that U.S. President Donald Trump should abide by the deal.

This comes in the wake of growing expectations that Trump will withdraw from the 2015 Iran nuclear deal by May 12, leading to the re-imposition of secondary sanctions on Iran, pressuring countries to cut their purchases of Iranian crude.

RBC said last week that the Iran deal “remains on life support,” as the Iranians were “very unlikely,” to satisfy the demands of US President Trump and his “ultra-hawkish” advisors.

Geopolitical tensions and ongoing OPEC cuts, supported a rally in crude prices to a three-year high last month against the backdrop of rising U.S. output.

U.S. production rose to 10.6 million barrels per day last week, the Energy Information Administration said Wednesday, leading to massive build in domestic crude supplies.

Inventories of U.S. crude rose by 6.218 million barrels for the week ended April 27, confounding expectations for of just 0.739 million barrels, according to data from the EIA.

Total OPEC production fell to the lowest since March 2017, according to a monthly report from OPEC last month, following persistently strong compliance by major oil producers with the deal to curb output.

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