OIL WARNING: Trump's decision on Iran nuclear deal could push up prices

Oil Price Outlook

The EIA yesterday reported that USA drillers had produced an average 10.586 million barrels daily in the week to April 20, a record-breaking production rate.

U.S. West Texas Intermediate (WTI) crude CLc1 fell 39 cents to $67.80 a barrel.

The statistical arm of the US Energy Department, the Energy Information Administration, made this known on Wednesday, revealing that the crude oil exports rose by 582,000 barrels per day last week to an all-time record high of 2.331 million barrels per day.

Crude-oil prices are still largely dependent on the production numbers from the OPEC members, although the United States has recently overtaken Saudi Arabia to become the world's second largest oil producer.

In addition to fundamentals, there has been a shift in geopolitical sentiment after France's president Emmanuel Macron yesterday called for a new Iran deal to avoid the imposition of US sanctions against Tehran that the latter warned will lead to serious consequences, without going into detail.

On the charts, WTI crude continues to remain in a long-term uptrend following the 13-year lows set in February 2016.

Senate Judiciary Committee votes to bar Trump from firing Mueller
After a firing, the special counsel would have 10 days to seek an expedited review of his dismissal. Thursday, Grassley said "transparency and accountability" are in the public interest.

Khoman said Trump's "hawkish" circle of advisors - with Iran critics including Mike Pompeo (Trump's nominee for secretary of state) and John Bolton (Trump's national security advisor) - makes it likely that the US will choose to re-impose sanctions on Iran.

"President Trump said the Iran nuclear deal was insane and ridiculous, yet that does not mean necessarily that he is going to back out of it", Phil Flynn, the senior market analyst for the PRICE Futures Group in Chicago, said in a daily emailed newsletter. U.S. Defense Secretary Jim Mattis said Thursday that there's been no decision on the nuclear deal. Gasoline stocks were down (-3.0m vs. -0.3m expected) while distillate stocks (-3.0m vs. -0.4m expected) were also down.

Such figures would usually weigh on prices, but the market appears to be much more focused on the possibility of new sanctions against Iran.

The prospect of new sanctions on Iran threatens to further tighten supply in the oil market.

WTI is up 14% this year while Brent is higher by 12%.

The Energy Information Administration (EIA) said the USA may drastically reduce its import of crude oil from Nigeria by 2022, going by its projection of becoming a net energy exporter in four years. Analysts polled by S&P Global Platts predicted a decline of 1.1 million barrels in crude stockpiles and 500,000 in gasoline supplies for last week.

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