Oil prices fell back after record US production exceeded that from Opec heavyweight Saudi Arabia. But markets drew continued support from the likely dissolution of the Iran nuclear deal, which could take up to 1 million barrels per day of oil from an already tightening market. US government data released Wednesday showed US crude production hit a new weekly record of 10.62 million b/d — more than Opec heavyweight Saudi Arabia and just below the world’s biggest oil producer, Russia. US President Donald Trump has set a May 12 deadline for European leaders to “fix” the Iran nuclear deal or risk the US walking away. Iran has said any change to the 2015 agreement with global powers would be unacceptable, making it likely Trump will bring back sanctions against Iran, cutting into global supply and escalating geopolitical tensions in a one-two bullish punch for oil. A substantial risk premium is already baked into prices, but there is still potential upside in the form of Iran sanctions, escalating rhetoric and actions in Syria that could see Iran and Israel brought into open conflict and Houthi attacks on oil infrastructure in Saudi Arabia. Most price pundits see oil prices peaking this quarter or early in the third quarter before embarking on a downward slope, driven by continued incremental oil production, the potential easing of tensions and logistical hurdles in North America that will weigh on prices. International pricing benchmark Brent lost $1.32 per barrel on the week to settle at $73.62/bbl Thursday, while US domestic price-pin West Texas Intermediate gained 24￠/bbl to close at $68.43/bbl.
展开▼
