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Oil caught between Iran pressures and surging United States output

May 04, 2018 03:16·
An oil pump is seen at sunset outside Vaudoy-en-Brie

An oil pump is seen at sunset outside Vaudoy-en-Brie

Futures in NY fell for the second session this week, down as much as 1.1 percent on Thursday.

Oil prices fell Wednesday after the U.S. Energy Information Administration said crude supplies rose 6.2 million barrels for the week ended April 27.

June crude lost 24 cents, or 0.4%, to $67.01 a barrel on the New York Mercantile Exchange, down from $67.32 before the supply data. Oil futures have recently moved in tandem with equity markets.

"If Trump abandons the deal, he risks a spike in global oil prices", said Ole Hansen, head of commodity strategy at Saxo Bank, adding that reintroducing USA sanctions could remove 300,000-500,000 bpd of Iranian oil from global supplies.

Trump has all but chose to withdraw from the accord by May 12, sources said on Wednesday, though exactly how he will do so remains unclear. USA crude production increased to an unprecedented 10.62 million barrels a day.

Overall, OPEC produced around 32 million bpd of crude in April, according to a Reuters survey, implying that its production is slightly below its target of 32.5 million bpd, due largely to plunging output in Venezuela.

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The sanctions on Iran were lifted under a 2015 agreement among a group of world powers, including.

The EIA reported Wednesday that US crude inventories rose 6.22 million barrels last week, although a large portion of the build came from the West Coast.

However, the rising value of the dollar since mid-April and soaring United States supplies have helped check further oil price gains, traders said.

Rising inventories are in part a result of soaring US production C-OUT-T-EIA, which has jumped by a quarter in the last two years to 10.6 million bpd, making the United States the world's number two crude oil producer behind only Russian Federation, with 11 million bpd.

Crude stocks at the Cushing, Oklahoma, delivery hub rose by 416,000 barrels, EIA said.

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