Oil breaks US$70 as market awaits U.S. call on Iran

Oil breaks US$70 as market awaits U.S. call on Iran

All of these factors could limit gains. Gains were capped by Sino-US trade tensions. Without oil, big agricultural producers would not be able to produce the food we eat in large scale.

Dry weather focus has seen the grains and soybean sector find support. Not surprisingly, this resulted in a rebound in US gasoline demand and a material improvement in once-high inventory levels.

Traders already know what Iran and Venezuela produce so disruptions to supply from these two nations will be limited to what they produce. US President Donald Trump has until May 12 to make a call on Iran.

The 2015 accord eased sanctions on OPEC's third-largest member in exchange for curbs on its nuclear program, and renewed USA measures might stifle the Middle East nation's crude exports.

This season's higher gas prices has people like Tina Peacock of Clermont rethinking driving habits.

Iran had been developing nuclear weapons, and renewed attempts to obtain weapons could prompt economic or military threats from the U.S., European Union, or neighboring countries like Saudi Arabia, Israel, or Turkey.

Too much have been said in recent days about the impact of a new round of USA sanctions on the Iranian oil sector. Market sources have estimated USA exports to Europe would average 800,000 bpd between mid-May and mid-June, including 25 million barrels in May overall.

"They can not stop Iran". The global benchmark crude was at a $5.30 premium to July WTI. The crude oil markets continue to be influenced by OPEC quotas, and of course geopolitical issues in the Middle East, which always tend to push oil prices higher. The net-long in the market is by historical standards now very stretched, not least in Brent crude where only one short exists per 20 longs. In 2016, the United States imported an average of 797,000 barrels per day of crude oil and petroleum products from Venezuela, a decline of 49% from a decade ago.

The Iranian oil minister noted the country's gasoline production in the first quarter of last year was 62 million liters per day, while that volume reached 77 million liters in the first quarter of this year and will reach 96 million liters in the last quarter of this year. Pipelines increasingly running close to capacity have dislocated the price of oil produced in the Permian region in West Texas from the rest of the US.

I am concerned heading that all of the market focus heading into May 12 seems to have been dictated on how the price of oil might react, without looking at the connotations that the United States pulling out might have on other asset classes.

Brent Crude at 75.22 to test the prior high at 75.60 and looks Bullish in here.

Anger is boiling over in Iran as people have taken to the streets to protest worsening economic conditions such as high unemployment and rising food prices, reports the WSJ's Asa Fitch.

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