Crude Oil Prices Settle Just Shy of $70 as Iran Sanctions Decision Looms

Investing.com – Crude oil prices settled at three-and-a-half-year highs as traders increased their bets the U.S. would pull out the Iran nuclear deal next week, raising the potential for tighter global crude stockpiles.

On the New York Mercantile Exchange for June delivery rose $1.29, or 1.89%, to settle at $69.72 a barrel, while on London’s Intercontinental Exchange, rose 1.75% to trade at $74.91 a barrel.

Ahead of U.S. President Donald Trump’s decision to stick or twist with the Iran nuclear deal, traders appeared to bet that Trump would likely choose the latter, leading to the re-imposition of secondary sanctions on Iran, pressuring countries to cut their purchases of Iranian crude.

New sanctions against Iran – the third-largest OPEC producer – would likely slash global supplies at a time when the country’s exports rose to a post-deal high, according to Bloomberg.

Iran crude shipments climbed to 2.48 million barrels a day last month from 2.06 million a day in March, Bloomberg said Tuesday, citing ship-tracking data.

Focus on the prospect of lower global supplies has dominated flows in oil prices, overshadowing data from energy services firm Baker Hughes showing the number of oil rigs operating in the US , that was the fifth-straight weekly increase.

The relentless pace of US oil expansion has continued unabated rising to 10.6 million barrels per day last week, the Energy Information Administration said Wednesday. Offsetting that, however, was continued output cuts from OPEC and its allies.

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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