Oil Rebounds on Trump Sanction Threats
by Bloomberg | Alex Longley, Joe Ryan
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas
US oil futures broke a three-day string of losses as equity markets strengthened and President Donald Trump threatened broader sanctions against buyers of Iranian crude.
West Texas Intermediate settled 1.8% higher, at $59.24 a barrel, after Trump said that any nation or person who buys oil or petrochemicals from Iran will be subject to secondary sanctions. It was the biggest one-day increase for US oil futures in more than a week.
The gains come after prices have fallen sharply since OPEC+ last month rocked the market with its surprise decision to pump more than expected, just as other producers including Guyana also ramp up output.
Reuters reported Wednesday that Saudi officials have told allies the kingdom can endure a period of depressed prices, reinforcing expectations it will steer OPEC+ to another supply surge at a meeting May 5.
“We’ve been oversold the last few days and there’s a lot of speculation about Saudi flooding the market next week,” said Joe DeLaura, global energy strategist at Rabobank. “Traders are taking a breather and pulling off some risk before the weekend and OPEC meeting.”
Despite the pressure on prices, the market faces supply risks.
Trump’s Senate ally Lindsey Graham said he had the commitment of 72 colleagues for a bill that would enact “bone-crushing” sanctions on Russia, and tariffs on countries taking its oil, if Vladimir Putin didn’t engage in serious talks to end the war in Ukraine.
The US has also been repeatedly sanctioning entities involved in the transportation of Iranian crude, and targeting Venezuelan shipments, too.
Yet on the demand side, data Wednesday showed the US economy shrinking for the first time since 2022, while factory activity in China slipped into the worst contraction since 2023. That overshadowed more bullish figures showing US crude and gasoline inventories dropped last week.
Oil Prices:
- Brent settled at $62.13 a barrel in London
- West Texas Intermediate settled at $59.24 a barrel
by Bloomberg | Alex Longley, Joe Ryan
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas