Iran and US Drawdown Push Oil to $74

June 28, 2018 Share Print 0

U.S. oil prices rose to a three-and-a-half year high on Thursday, bolstered by supply concerns due to U.S. sanctions that could cause a large drop in crude exports from Iran.

U.S. West Texas Intermediate (WTI) crude futures rose 83 cents to $73.59 a barrel, up 1.1 percent. It reached $74.03 earlier in the session, highest since Nov. 26, 2014.

The United States this week demanded all countries halt imports of Iranian oil from November, a hardline position the Trump administration hopes will cut off funding to Tehran.

On Thursday, officials said they would work with countries on a case-by-case basis. China, the biggest importer of Iran’s oil, has not committed to the U.S. position.

“The sanctions are trying to isolate Iran a bit more, and that potentially cuts more oil off from the overall global arena as a whole,” said Mark Watkins, a regional investment strategist at U.S. Bank Wealth Management.

“If you’re having Iran’s oil taken off the market, then you have a decrease in supply and by all means, that’s going to put more pressure on the price of oil to move up.”

via CNBC

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.