Crude oil futures down at Rs 4545 per barrel

Crude oil futures down at Rs 4545 per barrel

On Wednesday, oil futures settled modestly higher, bouncing back from earlier weakness that was driven by data showing an unexpectedly weekly climb in US crude supplies.

Oil rose on Thursday, supported by expectations of renewed USA sanctions on Iran, declining output in Venezuela and continuing strong demand. In terms of the upside risk to oil prices, we think that anything north of $80 for Brent crude and WTI above $75 could firmly take place. Subscribe on Apple Podcasts.

But the rise in U.S. Treasury yields above 3 percent has driven the dollar.DXY to three-month highs, making oil more expensive for buyers using other currencies.

Meanwhile, West Texas Intermediate was down 16 cents, or 0.23 per cent, at $68.03, while global benchmark Brent was down 17 cents, or 0.23 per cent, at $74.57 a barrel. Meanwhile, the US benchmark crude has averaged around $66 a barrel so far this month and analysts and traders surveyed by Bloomberg are bullish on USA futures as OPEC trims output against a backdrop of record American crude output.

Focus within the oil market remains on whether President Trump will decide to reimpose sanctions on Iran in coming weeks.

The key factor that should keep volatility at elevated levels until at least May 12 is whether the Trump Administration will restore sanctions on Iran that were lifted during the Obama Administration after an agreement over its disputed nuclear program. It is widely anticipated that President Trump will pull the USA out of the Iran nuclear deal, which is bullish for prices, said Abhishek Kumar, senior energy analyst at Interfax Energy's Global Gas Analytics.




Venezuela's crude production has fallen from nearly 2.5 million barrels per day (bpd) in early 2016 to around 1.5 million bpd due to political and economic turmoil.

The US 10 year Treasury yield has drifted back below 3% overnight (it now sits at 2.99%).

Soaring U.S. output has made WTI crude around $6 per barrel cheaper than Brent and drawn exports to record highs over 2 million bpd. That's an increase of more than a quarter since mid-2016.

Crude imports climbed 539,000 b/d last week to 8.469 million b/d, while refinery utilization rates averaged 90.8% for the week ending April 20, down 1.6%.

"The market does look a little toppish", said Greg McKenna, chief market strategist at futures brokerage AxiTrader.

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