MARKET WATCH: Brent crude oil breaks above $75/bbl

April 24, 2018
Brent crude oil rose above $75/bbl on the London market during Apr. 24 trading, its highest since 2014. The Apr. 23 settlement for Brent’s June contract was $74.71/bbl. Analysts attributed rising oil prices to uncertainty about possible sanctions against Iran.

Brent crude oil rose above $75/bbl on the London market during Apr. 24 trading, its highest since 2014. The Apr. 23 settlement for Brent’s June contract was $74.71/bbl. Analysts attributed rising oil prices to uncertainty about possible sanctions against Iran.

Societe Generale analysts noted US President Donald Trump has a May 12 deadline to decide whether the US will continue to participate in an international agreement that lifted sanctions against Iran for its nuclear program. Trump has criticized the agreement.

“Many in the oil markets assume that oil sanctions will snap back on Iran,” Societe Generale analysts said. They forecast a 70% probability that US sanctions will be implemented, which could contribute to higher oil prices.

Giovanni Staunovo, UBS Wealth Management analyst, said that Brent might reach the $80/bbl level assuming Trump were to withdraw from the Iran deal. He added that it’s unclear how much volume might be lost as a result.

Societe Generale analysts also said they are watching Libya where Khalifa Haftar, head of the Libyan National Army, reportedly is in poor health. Any increased instability in Libya could disrupt crude oil production and exports, analysts said.

Energy prices

The May light, sweet crude contract on the NYMEX gained 24¢ on Apr. 23 to settle at $68.64/bbl. The June contract rose 29¢ to $68.47/bbl.

The NYMEX natural gas price for May gained 1¢ to $2.74/MMbtu. The Henry Hub cash gas price was $2.74 on Apr. 23, up 2¢.

Ultralow-sulfur diesel for May was up nearly 2¢ to a rounded $2.14/gal. The NYMEX reformulated gasoline blendstock for May rose nearly 3¢ to a rounded $2.12/gal.

Brent crude oil for June climbed 65¢ to settle at $74.71/bbl on London’s International Commodity Exchange. The July contract was up 66¢ to $74.01/bbl. The gas oil contract for May was $647.50/tonne, up $6.25.

The Organization of Petroleum Exporting Countries’ basket of crudes averaged $70.51/bbl on Apr. 23, up 15¢.

Contact Paula Dittrick at [email protected].