The crude oil prices went down during the last days of the week, although the commodity remains close to its peak reached in the previous session, after the likelihood of United States sanctions against one of the major OPEC producers Iran may further tighten the market.
Brent crude futures were at US$77.23 per barrel at 0705 GMT, down 24 U.S. cents, or 0.3%, from their last close.
Outside OPEC, soaring USA crude oil production could help to fill Iran's supply gap.
The remarks from Middle East producers "did force investors to look a little bit more closer at the impact of USA sanctions on Iran and certainly there's some questions about the impact that we'll eventually see", Daniel Hynes, a senior commodities strategist at the Australia & New Zealand Banking Group Ltd., said by phone from Sydney.
Michael Wittner, analyst at Societe Generale, forecasts USA sanctions will remove 400,000 to 500,000 bpd of Iranian crude from the global market.
Brent crude oil futures at one point touched their highest since November 2014 at $76.75 per barrel. The five-year supply average is 420 million barrels.
"In 2012 the reduction in Iranian crude production and exports was around 1 million bpd", Wittner said.
Also supportive to prices was data from market intelligence firm Genscape showing that inventories at Cushing, Oklahoma, the delivery point for US crude futures, fell more than 400,000 barrels in the week to May 11, according to traders who saw the data. Nonetheless, speculators wasted no time in positioning themselves ahead of the future shortage.
At 11:20 a.m. EDT on Wednesday, both WTI and Brent prices were surging almost 3 percent, with Brent touching $77 a barrel, following President Trump's withdrawal from the Iran deal and EIA's weekly inventory report showing draws across the board.
CNBC has told consumers to prepare for crude oil prices to reach $100 per barrel, with a possibility of prices reaching as high as $150 per barrel on the back of continuing instability in the Middle East. The market is now focused on OPEC and other oil suppliers' ability to cope with potential supply disruptions. This would essentially end the OPEC-led deal to trim production.
Additionally, there are also some traders who believe soaring US crude oil production may also help fill Iran's supply gap. The rig count is a forward-looking indicator on production. Long investors may be encouraged to book profits on this news in an effort to drive prices back into value areas.
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