Oil Prices Rise on Tightening Global Market Signs

Brent Crude Oil

The renewal of sanctions is due to take between 90 and 180 days, with the most important limitation reportedly having to do with Iran engaging in financial operations with the USA dollar, as well as Iran's oil sales and other energy-related investments, including those through the Central Bank of Iran.

Unfortunately for motorists, that glut has been drained by a combination of strong global demand and production cuts from Venezuela and a collection of OPEC and non-OPEC oil producers.

"Russian and Chinese firms in particular may still be willing to invest in Iran, but if sanctions result in excess capacity at existing fields, there will be little economic rationale to support new developments".

US President Donald Trump directed his Secretaries of State, Energy, and the Treasury to significantly reduce the amount of petroleum and petroleum products bought from Iran, according to a memorandum released by the White House on Monday.

The oil inventories is a key fact of the oil market balance, the decline of the oil stock is sign of the rebalance of the market.

Brent and WTI last week reached their highest since November 2014 at $78 and $71.89 per barrel respectively, as markets expect Iran's oil exports to fall significantly once USA sanctions bite later this year.

President Donald Trump is set to announce Tuesday whether the US will waive sanctions against Iran as part of landmark nuclear agreement or exit the deal, a move that experts and officials have said could have a huge impact on oil and gas prices.

During April, refinery maintenance coupled with a release of floating storage volumes pushed Iran's crude and condensate exports to multi-year highs, although output remained stable, Platts reported in an analysis of the situation.

In a television interview, U.A.E. Energy Minister Suhail Al Mazrouei said "don't worry about supply", because OPEC has an adequate "buffer" of potential production to offset barrels lost through renewed sanctions.

The tightening market has all but eliminated a global supply overhang which depressed crude prices between late 2014 and early 2017. US drillers will account for about 89 percent of that growth, with Canada, Brazil, the United Kingdom and Kazakhstan also pumping more, according to OPEC.

"Our view is unchanged: Trump will reimpose oil sanctions", he said Tuesday. The IEA says non-OPEC supply is set to grow by 1.8 million barrels per day in 2018, somewhat more than OPEC's expectations.

The technical chart for oil still looks healthy in the long run.

The daily price chart is more mixed, however, with the completion of a Doji Star Bearish Reversal candle last Thursday. This scenario generally shows an erosion of confidence in the current uptrend that could extend into this week.

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