Crude oil price holds above $68 with Trump-Iran standoff in focus

Crude oil price holds above $68 with Trump-Iran standoff in focus

Brent crude is now priced at $73.83 per barrel and West Texas Intermediate (WTI) at $68.43.

US President Donald Trump has been very vocal of his displeasure with the current 2015 deal that has lifted trading sanctions and implemented regulatory safeguards on Iran's nuclear capabilities.

Oil output in Venezuela, a member of the Organization of the Petroleum Exporting Countries (OPEC), has fallen from nearly 2.5 million barrels per day (bpd) to just around 1.5 million bpd now due to political and economic turmoil in the South American country.

Trump will decide by May 12 whether to restore the sanctions, which would probably result in a reduction of Iranian oil exports.

Oil rose on Thursday, supported by expectations of renewed USA sanctions on Iran, declining output in Venezuela and ongoing strong demand.

U.S. oil major Chevron Corp has evacuated executives from Venezuela after two of its workers were imprisoned over a contract dispute with state-owned oil company PDVSA.

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The statistical arm of the US Energy Department, the Energy Information Administration, made this known on Wednesday, revealing that the crude oil exports rose by 582,000 barrels per day last week to an all-time record high of 2.331 million barrels per day.

Yet, underlying sentiment in the oil market remained positive amid ongoing investor expectations that OPEC-led supply cuts would continue to rid the market of excess supplies.

A loading programme compiled by Reuters showed that exports of crude from Nigeria averaged 1.61 million bpd.

Overall U.S. crude production continued to grow, rising last week to 10.59 million bpd - though the weekly figures are less reliable than monthly data that, as of February, still had the United States producing a shade under 10 million bpd.

Brent, against which Nigeria's oil is priced, stood at $73.87 per barrel as of 8:05pm Nigerian time on Wednesday, while the WTI traded around $67.90 per barrel.

Oil prices on Wednesday fell back from more than three-year highs reached the previous session, as rising USA fuel inventories and production weighed on an otherwise bullish market. Bloomberg reports that some traders have already stopped signing contracts for Iranian crude whilst others have inserted clauses that allow them to stop taking oil from Iran if sanctions are reimposed.