Oil prices extended gains on Tuesday, propped up by statement by Israeli Prime Minister Benjamin Netanyahu that he was positive U.S. President Donald Trump would take the correct course of action in reviewing whether to reimpose Iran’s nuclear pact with western powers.
U.S. WTI crude rose 24 cents or 0.4 percent at $68.81 per barrel, after closing up 47 cents on Monday. London Brent crude was up 21 cents at $74.90 per barrel.
Trading activity in Asia was subdued as many markets including China, India and Singapore were shuttered for public holidays.
On Monday, oil prices surged after Netanyahu increased pressure on the U.S. to abandon the 2015 nuclear agreement with Iran, claiming he has proof of a secret Iranian nuclear weapons programme. Tehran denied it has pursued nuclear weapons.
Trump has given the UK, France and Germany until May 12 to revise what he views as the deal’s shortcomings or he will reimpose economic sanctions.
According to analysts, if the deal is not renewed, Iranian oil exports are expected to plunge, which could result in a complete supply shortage and jack up Brent prices to almost $90 per barrel.
Oil prices traded within $1 of more than a three-year high reached in late April amid worries over the possible disruptions to Iranian crude flows. According to analysts, the market is highly sensitive to any developments on the nuclear pact and the possible re-imposition of sanctions.
In the U.S., crude production surged 260, 000 bpd to a record high of 10.26 million bpd in February, according to the EIA.
The material has been provided by InstaForex Company – www.instaforex.com