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Crude Oil Rises on Threat of Sanctions Against Iran, OPEC Production Curbs

May 3, 2018 at 19:16 by Vladimir Vyun

Crude oil gained today amid the threat of sanctions on Iran from the United States. Iran returned to the global market as a major oil supplier after international sanctions were lifted in 2016, while Iran curbed its nuclear program in return. But now, US President Donald Trump announced that the USA will withdraw from the accord by May 12, reinstalling sanctions, unless the deal will be renegotiated. Iranian Foreign Minister Mohammad Javad Zarif accused the USA of “bullying” and said that renegotiation is unacceptable.

Crude also continued to get support from output cuts performed by the Organization of Petroleum Exporting Countries and its allies. According to data from Reuters, the OPEC produced 32 million barrels per day in April, a little below its target of 32.5 million bpd. Meanwhile, Russia reported that its compliance with the output cut deal was at 95.2%.

Contract for delivery of WTI crude oil in June rose 0.78% to $68.46 per barrel as of 19:03 GMT on NYMEX today. July futures for Brent crude advanced 0.42% to $73.67 per barrel on ICE.

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