Crude Oil Jumps on Saudi-Iranian Tension, Venezuela

Crude oil prices saw another session of gains on Tuesday as the tension between Saudi Arabia and Iran continued as expected, while Venezuelan production has been falling further, helping the supply to correct a little.

At the time of writing, the global benchmark Brent crude oil futures were seen trading 0.77% higher at $66.56 a barrel, while the U.S. benchmark, the West Texas Intermediate (WTI) saw a jump of 0.97% to trade at $62.74 per barrel.

The Saudi Foreign Minister Adel al-Jubeir stated for reporters that the nuclear agreement between Iran and other countries is a “flawed agreement.”He explained that the Saudi Arabia is putting efforts to impose stricter policies against Iran for number of years.

Saudi Arabia and Iran are traditional competitors in the region. Saudi Arabia is constantly requesting Iran to stop interfering to Saudi’s surrounding territories, while Iran is calling Arabia as a confronting element in the region. However, now the Saudi Arabia is worried about nuclear weapons allowed for Iran to produce.

In South America, Venezuelan production of crude oil has fallen to only half since 2005, making less than 2 million barrels per day (bpd), according to the report from the International Energy Agency (IEA). Such drop in production is helping the sentiment on oil market, as Venezuela is a country with the biggest natural oil reserves.

Nevertheless, this factor is not helping the situation for a longer time as the United States are constantly pumping more and more oil from their producers, remaining at the top 2 global producers’ position, getting closer to Russia.

On the other hand, OPEC is still committed to keep its obligations under the agreement on crude oil supply cuts by the end of 2018 together with Russia and some other oil producers.

Next fundamentals to be watched by the oil traders will come out later today, published by the American Petroleum Institute (API) at 10:45PM CEST and the official U.S. inventories data will be published by the Energy Information Administration (EIA) on Wednesday at 3:30PM CET.

More news can be found at: now.axiory.com