Petroleum prices ended notably greater, extending gains from previous session, amidst rising potential customers of a shortage in crude supply in the worldwide market.
The U.S. federal government’s decision to stop granting sanctions waivers that allow minimal imports of Iranian crude pushed oil rates up north on Monday and the pattern continued today as well.
West Texas Intermediate Crude oil futures for June wound up $0.75, or 1.1%, at $66.30 a barrel, a near six-month high.
Brent unrefined futures for June rose to a high of $74.73, the best level in about 6 months, before falling to around $74.55 a barrel.
On Monday, petroleum futures for June wound up $1.70, or 2.66%, at $65.70 a barrel.
The U.S. on Monday came out with an announcement on Monday, stating it would not extend waivers to buy Iranian crude oil for India, China, Turkey, Japan and South Korea when those waivers expire early next month.
The buyers of Iranian oil need to stop purchases by May 1 or face sanctions, it said.
Following U.S.’s choice, Iran has threatened that it will shut the Strait of Hormuz, a key chokepoint for Persian Gulf crude manufacturers, according to a report in Bloomberg.
Saudi Arabia’s energy minister Khalid Al-Falih stated in a statement that the nation would collaborate with other crude producers to guarantee that sufficient materials are available and the market “does not head out of balance.”
“In the next couple of weeks, the Kingdom will be consulting closely with other producing nations and essential oil consuming nations to make sure a healthy and steady oil market, for the advantages of consumers and producers as well as the stability of the world economy.”
On the other hand, traders are expecting the weekly oil reports. The American Petroleum Institute is arranged to release its weekly oil report later on in the day, while the Energy Information Administration’s unrefined inventory information is due Wednesday morning.
The material has been provided by InstaForex Company – www.instaforex.com