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Crude oil prices rose backed by geopolitical risks

May 05, 2018 13:39·
A worker on an oil rig in North Dakota. American output has been soaring as shale drillers take advantage of higher prices to boost output

A worker on an oil rig in North Dakota. American output has been soaring as shale drillers take advantage of higher prices to boost output

U.S. West Texas Intermediate (WTI) crude futures were trading 15 cents lower at $68.28 per barrel by 0719 GMT. That may put the U.S.in fast violation of the deal's phrases, which say sanctions stay lifted so long as Iran is complying with its phrases.

The collective OPEC, non-OPEC cuts appear to be balancing the market well as demand continues to be strong.

Lending some support was the latest Reuters survey that showed Opec pumped about 32-million barrels per day (bpd) in April, slightly below its target of 32.5-million bpd, due largely to plunging output in Venezuela.

Several sources familiar with the negotiations said that if Trump pulls out, a question for the Europeans will be whether this would be the start of a much harder US line toward Iran, including military confrontation.

Jihad Azour, director of the IMF's Middle East and Central Asia department, told CNBC reforms "will help them diversify the economy and to prepare for the post-oil era, as well as addressing some of the major challenges". Looking at growth in the region, Azour said he expected oil exporting countries in the region to grow at 2.8 percent in 2018 and more than 3 percent in 2019.

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Vedremo nei prossimi giorni se la trattativa verrà avviata con un tono di polemiche finalmente sedato, ora che la minaccia è stata rimossa.

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Talking of which, the one party that can reasonably claim something resembling a renaissance overnight is the Liberal Democrats . Leader Sir Vince Cable said the results were "very positive" and demonstrated the Lib Dems were "very much on the way back".

The Saudis have intimated as much, in order not only to improve their economy but to generate enough wealth to diversify away from oil as their main economic driver; this much was reiterated on Thursday in a column by John Kemp, market analyst for Reuters. Our short-term and medium-term outlook on crude remains bullish.

While European officials are looking to remain in the deal, President Trump has "all but decided" to exit the deal according to various reports in the media. Yesterday, Iran's foreign minister said that United States demands to to change the 2015 agreement were unacceptable. Iran has clearly said it is not interested in new talks and that the current accord is "non-negotiable".

With the stock market falling, Rob Haworth, senior investment strategist for US Bank Wealth Management, said he would expect oil prices to be lower than they now are. While crude prices were weak during European trading hours, prices rose during USA trading hours later in the day. "This, combined with constraints in (OPEC) production, could lead to higher prices".

If President Donald Trump follows through on his threat to pull the USA out of the Iran nuclear deal on May 12, the rest of the world will be thrust into uncharted territory, forced to navigate a complex web of US sanctions that were lifted under the landmark accord but would ostensibly be put back in place.

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