Oil prices settle higher amid economic data

Oil prices settle higher amid economic data

Oil prices settle higher amid economic data

Crude oil prices have increased more than 10% over the past month after President Donald Trump signaled it is likely the US will withdraw from a 2015 global agreement with Iran that eased sanctions in return for curbs to the country's nuclear program, the Wall Street Journal reports.

Benchmark Brent crude oil reached $78.60 a barrel, up 37c and its highest since November 2014. By 0800 GMT, Brent was up 20 cents at $78.43.

U.S. West Texas Intermediate (WTI) crude futures were at $70.88 a barrel, down 8 cents, though still not far off their November 2014 high of $71.89 a barrel reached last week.

Once the sanctions are reinstated later this year, traders expect a massive decline from 200,000 to about 1 million barrels per day (bpd) in Iran's oil exports, which may put the already squeezed crude markets at risk of becoming undersupply.

Oil price is now trending towards $80 per barrel following bullish trading that heightened yesterday in the global market which saw the price leap to $78 yesterday, up from $67 April average.

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When sanctions were imposed by the Obama administration on Tehran in 2012, Iran's oil exports dropped to roughly 1.5 million barrels per day (MMBPD).

The tightening market has just about solved the global supply overhang that has weighed down oil prices between 2014 and 2017.

OPEC figures published on Monday showed that oil inventories in OECD industrialized nations in March fell to 9 million barrels above the five-year average, down from 340 million barrels above the average in January 2017.

World oil prices have surged by more than 70 percent over the previous year as demand has risen sharply but production has been restricted by the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, and other key producers including Russian Federation.

The West Texas Intermediate for June delivery rose 0.26 US dollar to settle at 70.96 dollars a barrel on the New York Mercantile Exchange, while Brent crude for July delivery rose 1.11 dollars to close at 78.23 dollars a barrel on the London ICE Futures Exchange.

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