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Oil futures rebounded early Wednesday. hitting levels near the three-and-a-hlaf-year high after bullish data on US oil inventories. and in the wake of the US pulling out of the Iran nuclear deal.
Crude prices have swung wildly in recent days. as investors anticipated Trump’s decision on whether to withdraw from the Iran deal. Oil futures started sliding in the US late Monday. and fell as much as 4% in morning trade Tuesday before Trump announced his decision to abandon it. Crude clawed back some of its decline after Trump’s speech to settle about 2% lower.
Recently. June West Texas Intermediate crude oil rose $1.54. or 2.2%. to $70.60 a barrel. putting it back at highs seen Monday. when crude settled at $70.73 a barrel. the highest settlement for a front-month contract since November 26. 2014. On Tuesday. it settled down 2.4% to $69.06 a barrel.
International benchmark July Brent crude climbed $1.82. or 2.4%. to $76.67 a barrel. after closing down 1.7% to $74.85 a barrel on Tuesday.
Data from the American Petroleum Institute helped fuel the rebound. with US crude. gasoline and distillate inventories logging sizable declines last week. US crude supplies fell nearly 1.9 million barrels for the week ended May 4. the API reported. according to sources.
The weekly government report due later Wednesday is expected to show smaller declines. Analysts polled by S&.P Global Platts expect the Energy Information Administration to report a decline of 400.000 barrels in crude supplies. They also forecast supply declines of 600.000 barrels for gasoline and 1.9 million barrels for distillates.
Separately. Saudi Arabia pledged to help stabilise global oil markets after Trump said the US will withdraw from the 2015 Iran nuclear deal and reimpose “the highest level of economic sanctions“ against Iran. which could eventually hit global oil supplies. The prospect of lower production has helped push crude prices to 3 1 2-year highs in recent weeks.
The deal between Iran and a group of world powers had lifted most US and international sanctions on Tehran in return for its agreement to curb its nuclear activities. Some analysts have said the reinstatement of sanctions could lead to tighter global oil supplies as they make it more difficult for Iran to export oil.
After the roller-coaster ride Tuesday. “it’s difficult to know exactly where prices are headed“ amid the Iran. API and Saudi Arabia announcements. said Greg McKenna. chief market strategist at AxiTrader. But overall. oil is “still in a solid uptrend“.
Among other energy products traded on Nymex. June gasoline rose 1.9% to $2.151 a gallon. while June heating oil jumped 2% to $2.201 a gallon. June natural gas rose 0.3% to $2.739 per million British thermal units.
