Crude Oil Prices Surge Close to $80 BPD as Trump Hold Tariff

Oil prices have crossed trading at $70 per barrel last week, a price most oil stocks hovered since late last month due to a sudden decline in U.S. crude draws as well as announcement of United States President Donald Trump of ending a nuclear deal with Iran placing heavy sanctions back on the country and affecting its crude production.

Various Factors

The heavy sanctions being brought back to Iran by the U.S. raised concerns of the market of a shorter global supply as it will decrease oil exports from Iran pushing oil prices higher.

Since late last month, oil prices have rallied higher from trading from as low as $70 per barrel initially to around $77 per barrel less than two weeks ago when Trump confirmed his decision to pull out from the nuclear deal with Iran. Trump made previous threats before which has also supported higher oil prices. 

While Trump has announced his intentions to end the deal with Iran months ago, the growing crude production in the United States has offset the efforts of the OPEC as well as the possibility of a shorter crude production in Iran pushing crude prices to an eventual recovery.

Despite this, prices of crude oil retreated slightly last week due to slight concerns of the growing drilling activity in the United States. Nonetheless, crude oil futures still traded at the $70 per barrel level at $70.47 while Brent crude futures traded at $76.77 per barrel.

Last week, growing crude supplies in the United States continued to become a subject matter among the crude market as the Brent crude pushed past $75 per barrel. Despite this, oil prices touched $80 per barrel for the first time during the trading session on Friday.

Brent crude oil prices traded by around $80 per barrel which is also a price not seen since late 2014 representing a growth of more than 1%. A number of analysts then raised their expectations and optimism on the rally in crude prices with some forecasting oil prices to trade at as much as $100 in a couple of months.

Other factors such as the crisis in Venezuela which has caused a decline in their production also contributed to the recovery of oil prices as well as the previous geopolitical issues in the Middle East.

Currently, oil prices are set to budge on another possible growth and rise in the United States crude production. The country has recently overtaken Saudi Arabia and became the second-biggest producer in the world. Oil prices may retreat back below $60 per barrel should the U.S. draw close to Russia’s production who is currently the biggest producer in the world.

See also: US Sanctions Against Iran Push Oil Prices Up Above $70

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