Oil prices held steady on Tuesday as the dollar remained near a four-month high, with crude supported by worries that U.S. President Donald Trump may pull out of the Iran nuclear deal.
Brent sweet crude for new July delivery was up 1 cent at 74.70 dollars.
U.S. West Texas Intermediate crude for June delivery was up 2 cents at 68.59 dollars a barrel by 0649 GMT, Oil prices rose on Monday after Israeli Prime Minister Benjamin Netanyahu stepped up pressure on the U.S. to pull out of the 2015 nuclear-deal with Iran, presenting what he called evidence of a secret Iranian nuclear weapons programme.
Tehran has denied ever seeking nuclear weapons. Trade was quiet in Asia as many markets, including China, India and Singapore were closed for public holidays.
Trump has given Britain, France and Germany a May 12 deadline to fix what he views as the deal’s flaws or he will re-impose sanctions. “There are worries that Iran’s oil exports could fall by about 1 million barrels per day from current levels,” said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo.
“If that happened, Brent prices could jump to near 90 dollars (a barrel).”
Oil prices extended gains yesterday supported by comments from Israeli Prime Minister Benjamin Netanyahu that he was sure U.S. President Donald Trump would do “the right thing” in reviewing Iran’s nuclear deal with western powers.
U.S. West Texas Intermediate crude for June delivery was up 11 cents, or 0.2 percent, at $68.68 a barrel after settling up 47 cents on Monday. London Brent crude for new July delivery was up 11 cents at $74.80. The June contract expired on Monday, settling up 53 cents at $75.17.
Oil prices jumped on Monday, reversing earlier losses, after Netanyahu said Israel has evidence that Iran lied about its nuclear programme after signing the 2015 agreement with global powers. Iran dismissed Netanyahu’s accusations, calling them “propaganda”.
Trump has until May 12 to decide whether to restore sanctions on key oil-producer Iran that were lifted after the international agreement. Oil prices rose to the highest since November, 2014 in late April, driven by concern over potential disruptions to Iranian crude flows. Analysts said the market is extremely sensitive to any developments on the nuclear deal and sanctions.
Meanwhile, U.S. crude production jumped 260,000 barrels per day (bpd) to 10.26 million bpd in February, the highest on record, the Energy Information Administration said in a monthly report on Monday.