U.S. Oil Prices Hit $70 a Barrel for First Time Since ’14
https://www.nytimes.com/2018/05/07/business/energy-environment/crude-oil-prices.htmlMay 7, 2018
...Benchmark prices for American crude oil closed above $70 a barrel on Monday for the first time since 2014 as traders factored in a prospective United States withdrawal from the accord, which eased international sanctions on Iran in exchange for restrictions on its nuclear program.
Investors fear that a withdrawal would lead to new sanctions on Iran, the world’s fifth-largest producer of crude oil last year, further curtailing a global supply that is already relatively tight....
...Analysts estimate that reimposing sanctions on Iran could reduce the country’s daily oil sales by 300,000 to 600,000 barrels, or perhaps as much as one million barrels. But imposing new sanctions would most likely take time. And if prices stay high, Iran could increase its earnings from oil sales in the short run....
...That threat of a reduction in supply coincides with production cuts by the Organization of the Petroleum Exporting Countries and Russia, one of the world’s largest oil producers, that have helped drain a glut that was depressing prices. Their deal was reached in 2016 and began to take effect last year.
OPEC, led by Saudi Arabia, has a spotty track record of carrying out production cuts, but compliance has been strong this time. “I think we are where we are because OPEC got their groove back,†said Helima Croft, an analyst at RBC Capital Markets....
