U.S. oil prices rose above $70 a barrel today for the first time since November 2014 over a looming decision on whether the United States will walk away from a deal with Iran and instead re-imposes sanctions on Tehran, keeping worldwide oil markets on edge.
US West Texas Intermediate (WTI) crude futures rose 62 cents, or 0.9%, to $70.34 per barrel, up 66 cents from their last settlement. The Brent oil rose by 0.08% to 73.68 Dollars per barrel. President Trump is putting some pressure on the Europeans to make some changes to the Iran nuclear deal to make it acceptable to the U.S. If they don't come up with something viable then the U.S. will likely walk away from the deal.
Also supporting prices, North Sea oilfields connected to the Brent oil pipeline have stopped production due to a shutdown at the UK's Sullom Voe oil terminal, the Brent pipeline operator said, reducing output of the crude.
European powers still want to hand Trump a plan to save the Iran nuclear deal next week, but they have also started work on protecting EU-Iranian business ties if the US president makes good on a threat to withdraw, six sources told Reuters.
Prices have also gotten a lift from strong global demand and supply cuts by OPEC and Russian Federation. An Iranian official on Sunday said a "suitable price" is $60 to $65 a barrel.
This is raising concerns over a possible disruption in crude oil supply from the Middle East.
Iran's deputy oil minister for global and commercial affairs, Amir Hossein Zamaninia, elaborated on Iran's view on the market after Oil Minister Bijan Namdar Zanganeh earlier in the day said the country supports "reasonable" prices and is not an advocate of costlier crude.
If the United States imposes sanctions that will prevent those who do business with Iran from accessing the United States financial market, this could also mean that other countries will also stop buying Iranian oil.
However, fundamental signals this week have frequently taken a backseat to speculation over the fate of the 2015 Iranian nuclear deal, which eased economic sanctions in return for curbs on Iran's nuclear program. The market has priced in more than a 50 percent probability that the U.S.'s waiver against Iran won't be extended, but there's still "significant upside" should the waiver lapse, the bank said. USA production, driven by the explosion of shale output, is forecast to surpass 11 million b/d before the end of this year, which would make the United States the world's largest crude producer, surpassing both Saudi Arabia and Russian Federation at current rates.