Oil extends gains, buoyed by Iran sanction worries

Oil prices extended gains on Tuesday, supported by comments from Israeli Prime Minister Benjamin Netanyahu that he was sure U.S. President Donald Trump would do “the right thing” in reviewing Iran’s nuclear deal with western powers.

U.S. West Texas Intermediate crude for June delivery was up 11 cents, or 0.2 percent, at $68.68 a barrel by 0114 GMT, after settling up 47 cents on Monday.

London Brent crude for new July delivery was up 11 cents at $74.80.

The June contract expired on Monday, settling up 53 cents at $75.17.

Oil prices jumped on Monday, reversing earlier losses, after Netanyahu said Israel has evidence that Iran lied about its nuclear program after signing the 2015 agreement with global powers. Iran dismissed Netanyahu’s accusations, calling them “propaganda”.

Trump has until May 12 to decide whether to restore sanctions on key oil-producer Iran that were lifted after the international agreement.

Oil prices rose to the highest since November, 2014 in late April, driven by concern over potential disruptions to Iranian crude flows. Analysts said the market is extremely sensitive to any developments on the nuclear deal and sanctions.

Meanwhile, U.S. crude production jumped 260,000 barrels per day (bpd) to 10.26 million bpd in February, the highest on record, the Energy Information Administration said in a monthly report on Monday.

Trade was quiet in Asia as many markets including China, India and Singapore were closed on Tuesday for public holidays.

Source: Reuters