The light, sweet crude oil price for June delivery on the New York market settled above $70.70/bbl on May 7 while Brent crude oil prices in London settled above $76/bbl. Both benchmarks jumped by more than $1/bbl for a second consecutive trading session.
US President Donald Trump was expected to announce at 2 p.m. EST on May 8 whether US officials have decided to withdraw from a 2015 international agreement that lifted sanctions against Iran.
Trump repeatedly said he wants to abandon that agreement and impose new US sanctions on Iran. Many analysts anticipate that he will call for a US exit from the 2015 international agreement.
Barclays Research analysts issued a May 7 note saying that regardless of Trump’s decision, the current Iran deal will not survive. But Barclays analysts still expect little effect on Iran production in 2018.
Trump could decide against renewing US involvement in the oil-related sanctions waivers and enforce reduced Iranian imports within 6 months. Another option would be that he renews the waiver.
“Regardless, his foreign policy continues to ignite tensions in the main oil-exporting center and is thus price supportive,” said Michael Cohen of Barclays in New York.
Meanwhile, Reuters reported that Iran was preparing for the first full-scale exports of its West Karoun crude oil grade in May or June. Previously, Iran shipped samples of West Karoun crude.
Production from Iran’s West Karoun oil fields nearly doubled during the past year to 300,000 b/d, sources told Reuters. Iran now can ship West Karoun directly rather than blending it with other grades.
Energy prices
The June light, sweet crude contract on the NYMEX jumped $1.01 on May 7 to settle at $70.73/bbl. The July price was up $1.04 to $70.62/bbl.
The NYMEX natural gas price for June gained 3¢ to settle at $2.74/MMbtu. The Henry Hub cash gas price was $2.71/MMbtu on May 7, up 2¢.
Ultralow-sulfur diesel for June climbed 3¢ to settle at $2.18/gal. The NYMEX reformulated gasoline blendstock for June gained 2¢ to a rounded $2.13/gal.
Brent crude oil for July climbed $1.30 to settle at $76.17/bbl on London’s International Commodity Exchange. The August contract was up $1.31 to $75.83/bbl. The gas oil contract for May gained $14 to $655.50/tonne.
The Organization of Petroleum Exporting Countries’ basket of crudes averaged $72.45/bbl on May 7, up $1.46.
Contact Paula Dittrick at [email protected].
