Breaking News

Oil supported as investors factor in supply risks

CommoditiesApr 17, 2018 07:57AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: Oil pumping facilities are seen at Venezuela's western Maracaibo lake

By Amanda Cooper

LONDON (Reuters) - Oil edged up on Tuesday, supported by investors' growing concern over the potential for disruptions to crude supply, especially in the Middle East.

Brent crude oil futures (LCOc1) were up 4 cents at $71.46 a barrel by 1145 GMT, while U.S. crude futures (CLc1) edged up 8 cents to $66.30 a barrel.

Traders said oil markets were receiving general support due to the risk of supply interruptions, including a potentially spreading conflict in the Middle East, renewed U.S. sanctions against Iran and falling output in crisis-hit Venezuela.

"With so many potential supply disruptors in play and few signs that the current market upheaval will end any time soon, traders continue to pay the geopolitical risk premium," said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA in Singapore.

"Oil prices should remain bid ... at least through the Iran nuclear deal deadline (May 12) if not for the remainder of 2018," he added.

U.S. President Donald Trump has threatened to pull out of a nuclear deal between Iran and six major powers by May 12 unless Congress and European allies help "fix" it with a follow-up agreement.

If Washington does not renew sanctions relief for Tehran at this point, Iran may have difficulty exporting its crude.

Oil markets have been well supported this year, with Brent up around 16 percent from its 2018 low in February, due to healthy demand and supply cuts led by the Organization of the Petroleum Exporting Countries.

(For a graphic on 'U.S. oil production and inventories' click


Another main market driver has been the United States, where crude production has soared by almost a quarter since mid-2016, largely thanks to a booming shale industry.

The physical markets, particularly in the Atlantic Basin, are suffering from seasonal weakness that has pulled some grades to multi-month lows. [CRU/E] [CRU/WAF] [CRU/MED]

"We've got geopolitics on the one hand, which is bullish, but I don't think fundamentals are quite as convincing as people would like to believe," PVM Oil Associates strategist Tamas Varga said.

"I'm not saying oil won't run higher based on the situation in Syria, but I don't think this rally on geopolitics can be sustained unless it results in actual supply disruption."

U.S. shale oil production is expected to increase in May for the fourth consecutive month, U.S. Energy Information Administration (EIA) data showed on Monday.

The American Petroleum Institute publishes weekly U.S. fuel inventory data later on Tuesday, while official government data, including on production, is due from the EIA on Wednesday.

Oil supported as investors factor in supply risks

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email