Oil prices dip as prospects of sanctions against Iran thickens

Likewise, China has a voracious appetite for oil and may not wish to do Trump any favors in the midst of its trade spat with the United States, Wittner said. Aside from these, hedge funds have also reduced their net-long position in WTI. The latest weekly data from the EIA pegs exports slightly lower at 2.15 Mbd.

Fuel prices are especially politically sensitive in Asia's poorer countries, and a further risk is that higher costs could push governments to raise subsidies or introduce tighter regulation on prices, which could contain inflation but hurt central budgets and energy firms.

China surpassed the U.S.in annual gross crude oil imports in 2017 by importing 8.4 million barrels per day bpd compared with 7.9 million bpd of USA crude oil imports. However, the commodity recorded a gain of 3.7 percent for the month.

On Monday, US President Donald Trump said that Israeli PM Benjamin Netanyahu's revelations about Iran lying on its nuclear project show he's "100% right" about the Iranian nuclear agreement. His predecessor, Barrack Obama, has struck a deal with Iran and that will come to an end on May 12. Macron's language on the deal leaving the White House was certainly more complementary and in line with Trump than it was coming in.

In December 2016, at a meeting of oil producers in Vienna, 11 non-OPEC member countries, including Azerbaijan, agreed to cut oil production by a total of 558,000 barrels a day.

Further backing oil prices are declining output in Venezuela, OPEC's biggest producer in Latin America, and Angola, Africa's second-largest exporter.

Russia's pledge in the OPEC/non-OPEC deal is to shave off 300,000 bpd from its October 2016 level, which was the country's highest monthly production in nearly 30 years-11.247 million bpd. This included Syria conflict, tensions between Saudi Arabia and Yemen rebels.

Under the 2015 nuclear deal, Iran agreed to limit its nuclear activities, in exchange of lifting sanctions against the country. "Additionally, crude oil demand is expected to remain healthy in 2018 and 2019, higher than expected GDP growth".

USA producers are being incentivised to ramp up production as OPEC restricts production and raises prices. If you're an oil bull, 2.4 percent growth in the biggest market on the planet is pretty encouraging. He pointed out that "There's a lot of profit in the books here for the non-chemicals".

West Texas Intermediate (WTI) crude for June delivery traded at $67.48 a barrel on the New York Mercantile Exchange, down 62 cents, at 8.23am in London. The contract fell 0.4 per cent last week. Brent crude advanced 8 cents, or 0.11 per cent to Dollars 73.21 a barrel. In India, it could worsen the current account balance by 0.4 percent of GDP and increase inflation by 30-40 bps. The global benchmark crude was at $5.78 premium to July WTI.

Some of the traders buying Iranian oil said their existing contracts contain clauses allowing them to stop taking cargoes if sanctions are reimposed.

Futures for September delivery were little changed at 443.8 yuan per barrel on the Shanghai International Energy Exchange.

  • Zachary Reyes