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WTI Crude Oil Hangs Above $70, Brent Above $76

May 7, 2018 at 18:45 by Vladimir Vyun

Futures for West Texas Intermediate crude oil rallied past the $70 per barrel level today. Brent crude was trading above $76 per barrel. There were plenty of reasons for the commodity to rally.

The deadline of May 12 nears, when US President Donald Trump should decide whether to withdraw from the nuclear deal with Iran reached in 2015. The withdrawal can lead to renewal of sanctions against the Middle Eastern nation.

The efforts of the Organization of Petroleum Exporting Countries and its allies to limit oil production were also working in favor of the commodity. In particular, Saudi Arabia and Russia showed willingness to comply with the production cut deal in order to bolster prices.

The theme of Venezuela was also actively discussed by market participants as the South American nation was quickly reducing its oil output. S&P Global Platts said that Venezuela’s oil ministry predicted further decline of production:

Current oil output is around 1.4 million b/d, and the oil ministry’s “worst case scenario” projects a further 200,000 b/d decline by December to 1.2 million b/d, a ministry source told S&P Global Platts on condition of anonymity.

That would be a precipitous halving of output in two years.

Futures for delivery of WTI crude oil in June jumped 1.38% to $70.68 per barrel as of 18:34 GMT on NYMEX today. July contract for Brent crude leaped as much as 1.72% to $76.16 per barrel on ICE.

If you have any questions and comments on commodities today, use the form below to reply.

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