Oil rises on Iran sanction worries, but surging U.S. supplies cap market

Oil markets anticipate that President Trump will decide to pull out of the Iran nuclear deal, which would lead to a spike in prices, although how high a spike it will be is anyone's guess: the decision has been expected for a few weeks already.

Other reasons he cited were geopolitical disturbances and whether the Iran nuclear deal will be recertified or not.

Iran, a member of the Organization of the Petroleum Exporting Countries (OPEC), re-emerged as a major oil exporter in January, 2016 when worldwide sanctions against Tehran were lifted in return for curbs on Iran's nuclear program.

Brent gained about 0.5 per cent this week - its third consecutive weekly gain - while WTI posted a weekly loss of about 0.5 per cent. Prices for the more actively traded Brent July contact LCOc2 gained 90 cents to settle at $74.69.

West Texas Intermediate crude for June delivery rose as much as 60 cents to $67.85 a barrel on the New York Mercantile Exchange and traded at $67.68 at 10:10 a.m.in London. Iran denies the charge, and its President Hassan Rouhani urged Trump to stand by his existing commitments before making fresh demands. This is a cautious way to gain upside exposure to higher oil prices with limited downside.

United States gold futures were up 0.3pc at $1,326.30 an ounce.

Even with prices dipping, a strong dollar makes greenback-denominated oil more expensive to holders of other currencies including the euro. Without an extension from Trump, the exemptions will expire on Tuesday.

A new round of United States sanctions probably wouldn't succeed as well as the earlier curbs, said Robin Mills, head of Dubai-based consultant Qamar Energy.

Traders work on the floor of the New York Stock Exchange, (NYSE) in New York, NY, U.S., April 30, 2018.

That means if Brent averages $75 per barrel in 2018, India's current-account deficit would widen to 2.5 percent of GDP from 1.5 percent in 2017, they wrote. Last week, the contract dipped 0.4 percent. MSCI's all-country index of global equities .MIWD00000PUS shed 0.32 percent. However, the commodity has advanced for the month of April.

"Precisely what happens with Tehran's nuclear program remains the most significant driver in oil price sentiment", said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA. Investors look at the US yield curve for clues about the future economic outlook.

Spot gold was up 0.1pc at $1,324.95 an ounce, having touched its lowest since March 21 at $1,318.51. Global oil demand grew during the first three months of 2018 at the fastest pace in almost eight years, according to Goldman Sachs.

In March 2018, the central bank of the Republic of Turkey, gold reserves were worth 25.3bn dollars; 220 tonnes of Turkish gold was stored in the US. The oil market has tightened significantly in no small part due to the effectiveness of OPEC in draining bloated global inventories as well as the healthy demand outlook.

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