Crude Oil Prices in Asia Increases

In Asia, the oil prices increased on Thursday, which was triggered by an expectation that the U.S. will be re-imposing the sanctions against Iran.

The June delivery for Crude Oil West Texas Intermediate Futures was trading at $68.38 a barrel in Asia, went up 0.48 percent.

The June delivery for Brent crude also went up 0.53 percent at $74.38 per barrel.

Meanwhile, Shanghai crude oil futures for the September delivery increased 0.27 percent at 444.40 yuan or $70.27 per barrel.

According to French President Emmanuel Macron, he expected President Trump to pull out a deal with Iran back in 2015, wherein Iran has suspended its nuclear program in return for western powers lifting crippling sanctions.

The U.S. has until May 12 to decide whether it would leave the nuclear deal with Iran and execute new sanctions against Tehran, which would result in a reduction of its oil exports.

As of now, Iran is the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), and sanctions on the country could tighten the global oil supplies.

Adding to the concerns surrounding Iran, falling output in Venezuela, which is the largest producer in Latin America, has pushing up oil prices.

The crude oil production of Venezuela fell nearly 2.5 million barrels per day in early 2016 to around 1.5 million barrels per day due to a political and economic turmoil.

Meanwhile, the ongoing production cuts which are led by OPEC continuously support the oil prices. There is some confidence that the pact will be extended further than 2018.

The increasing production from the U.S., however, is still a key market that continues to weigh on the prices of oil.

On the other hand, the U.S. crude oil inventories went up by 2.2 million barrels to 429.74 million barrels. That is nearly 10 million barrels above the five-year average.

The crude oil production in the U.S. has hopped more than a quarter since mid-2016 to over 10.59 million barrels per day. Surpassing Saudi Arabia and now almost near Russia’s output of 11 million barrels per day.

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