Crude Oil Prices Settle Higher on Renewed Expectations for US Sanctions on Iran

Investing.com – Crude oil prices settled slightly higher amid renewed expectations for the U.S. to pull out of the Iranian nuclear deal which would cripple the country’s output reducing global supplies.

On the New York Mercantile Exchange for June delivery rose 14 cents to settle at $68.19 a barrel, while on London’s Intercontinental Exchange, rose 1.01% to trade at $74.75 a barrel.

Investor expectations for new U.S. sanctions grew after French President Emmanuel Macron said on Wednesday that he expected U.S. President Donald Trump to pull out of a deal with Iran reached in 2015.

If Trump does scrap the deal, it could lead to the re-imposition of secondary sanctions on Iran, pressuring countries to reduce their purchases of Iranian crude, denting global supplies.

This comes just a few days after Trump signalled on Tuesday that U.S. and France were close to reaching an agreement to preserve the Iran nuclear deal.

Trump will decide by May 12 whether to restore U.S. sanctions on Iran.

Bullish bets on rising Middle East geopolitical uncertainty disrupting global supplies has propelled crude oil prices above three-year highs despite ongoing U.S. oil expansion.

US output rose 46,000 barrels per day to 10.6 million barrels per day last week, according to data on Wednesday from the Energy Information Administration, cementing the United States’ position as the world’s second largest producer behind Russia.

That led to an unexpected build in U.S. crude supplies of 2.170 million barrels for the week ended April 20, confounding expectations for of 1.6 million barrels.

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