Recently, Trump has said that unless European allies rectify the "terrible flaws" in the global accord by May 12, he will refuse to extend us sanctions relief for the oil-producing Islamic Republic.
Inventories at the Cushing, Oklahoma storage hub climbed by about 152,000 barrels in the week to May 1, according to market intelligence firm Genscape, traders who saw the data said.
The Iranian Foreign Minister said on Thursday that the U.S. demands for a change in the nuclear deal are unacceptable.
State-owned producer Saudi Aramco on Wednesday raised the June price for its Arab Light grade for Asian customers to a premium of $1.90 a barrel to the Oman/Dubai average, the highest since August 2014. USA energy companies added oil rigs for a fifth straight week, with higher crude prices boosting profits and pushing nationwide production to record highs.
Still, growing USA crude supplies have been capping price gains.
However, Kemp posited a troubling possibility: while current high crude prices have enabled the kingdom to stabilize its drawdown on foreign reserves, it's questionable whether even further crude price gains will enable it to diversify: "Economic transformation will need hundreds of billions of dollars, and financing can come only from the kingdom's internal resources, or in the form of foreign loans, equity sales or direct investment".
Futures in NY were little changed on Friday, set for a 0.4% advance this week. "This, combined with constraints in (OPEC) production, could lead to higher prices". U.S. West Texas Intermediate (WTI) crude futures were 10 cents lower at $67.83 per barrel.
Markets will remain skittish as the May 12 deadline to rectify the deal approaches, ANZ Research said in note.
Surging production in the Permian basin has continued to outpace pipeline capacity, while local refining issues have exacerbated oversupply in the region, dealers told Reuters.
We're likely to see strength in the market if speculators continue to bet on the USA pulling out of the Iran deal. USA production, driven by the explosion of shale output, is forecast to surpass 11 million b/d before the end of this year, which would make the U.S. the world's largest crude producer, surpassing both Saudi Arabia and Russian Federation at current rates.
European powers still want to hand Trump a plan to save the Iran nuclear deal next week, but they have also started work on protecting EU-Iranian business ties if the USA president makes good on a threat to withdraw, six sources told Reuters.