Crude oil prices for June delivery briefly broke above $69/bbl on the New York market and $75/bbl in London during Apr. 24 trading, but both benchmarks closed lower. Oil traders suggest possible renewal of US sanctions against Iran could disrupt world oil flow.
Prices rose as US President Donald Trump on Apr. 24 again suggested a US withdrawal from a 2015 international agreement to curb Iran’s nuclear program. US officials face a self-imposed May 12 deadline regarding sanctions waivers.
But oil prices later retreated while French President Emmanuel Macron reportedly tried to get Trump to reconsider Iran. US light, sweet crude reached an Apr. 24 high of $69.38/bbl while Brent reached as high as $75.47/bbl that same day.
Trump is hosting two European leaders this week. German Chancellor Angela Merkel will be in Washington, DC, on Apr. 27. France and Germany are part of a six-nation pact with Iran to halt its nuclear program in exchange for sanctions relief.
Although Trump favors a US withdrawal from the pact, both Macron and Merkel want him to reconsider. Macron reportedly is willing to consider a new arrangement with Iran.
“The recent Trump-Macron meeting indicates that US officials and the European Union have found the middle ground to renegotiate the deal, which was Trump’s demand from the beginning,” said Sara Vakhshouri, president of SVB Energy International in Washington.
“Among all EU members, France was the first and most critique of Iran’s missile program,” she wrote in an Apr. 25 e-mail to OGJ. “Now the ball is in Iran’s hands to decide whether it wants to renegotiate the deal or not.”
She suggests that “this whole renegotiation process might delay the reappointment of the sanctions by Trump and buys more time for Iran.”
Separately, Russian Prime Minister Dmitry Medvedev signed an interim agreement this week to set up a free trade agreement between Iran and members of the Eurasian Economic Union. Medvedev suggests Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia could offer tariff concessions to Iran.
The US government was scheduled Apr. 25 to release its weekly crude and product inventory report.
The May light, sweet crude contract on the NYMEX declined by 94¢ on Apr. 24 to settle at $67.70/bbl. The June contract fell 90¢ to $67.57/bbl.
The NYMEX natural gas price for May gained 4¢ to $2.78/MMbtu. The Henry Hub cash gas price was $2.77/MMbtu on Apr. 24, up 3¢.
Ultralow-sulfur diesel for May was down about 1¢ to a rounded $2.13/gal. The NYMEX reformulated gasoline blendstock for May fell nearly 3¢ to a rounded $2.09/gal.
Brent crude oil for June declined 85¢ to settle at $73.86/bbl on London’s International Commodity Exchange. The July contract was down 94¢ to $73.07/bbl. The gas oil contract for May was $658.75/tonne, up $11.25.
The Organization of Petroleum Exporting Countries’ basket of crudes averaged $71.34/bbl on Apr. 24, up 83¢.
Contact Paula Dittrick at [email protected].