Venezuela, Iran Worries Lead WTI Back Over $70

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As of midday Friday, oil prices traded near $70 per barrel for the first time since 2014.

Hedge funds cut their net long U.S. crude futures and options positions in the week to May 1 by 11,825 contracts to 444,060, according to the U.S. Commodity Futures Trading Commission. Iran seems to be at the forefront because on May 12 U.S. president Donald Trump is expected to decide whether to renew the oil sanctions waivers on Iran or impose sanctions on the country instead. At stake is the June 14, 2015 deal between Tehran and six world powers that lifted sanctions against the Islamic Republic in exchange for limits on the Iranian nuclear programme.

But U.S. output has soared by more than a quarter in the past two years to 10.62 million bpd and is likely to rise further this year as energy companies keep drilling.

The United States now produces more crude oil than top exporter Saudi Arabia, and two weeks of US inventory builds have limited the oil market's upside.

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The group is to meet next month in Vienna.

The price of oil has crossed $70/barrel and the trend is upwards.

Other than Saudi Arabia and the UAE, the only other OPEC country that appears capable of lifting output to a meaningful degree is Kuwait, which appears poised to add an additional 100,000 barrels per day to the cartel's total output.

The impact of Libya and Venezuela on oil prices is also another $2 to $5 in the form of a risk premium, making $80 per barrel for Brent a high possibility.

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Brent crude oil futures were at $75.81 a barrel on Monday morning, up 94 cents.

Friday's big gain provided most of the week's 2.4% rise in price. At the session high, they touched their peak since November 2014 at $75.91. Historically, Venezuela's basket set its highest weekly average ever on July 18, 2008, when it hit $126.46 before economies around the world began crashing under the weight of expensive oil. The Nasdaq added 61 points, or 0.9 percent, to 7,270.

While refusing to reveal what he'll do by May 12, Trump repeated his belief the existing accord is "a terrible agreement for the United States".

"The focus of oil markets is now on the U.S. president's pending decision on the fate of the Iran nuclear deal", said Victor Shum, an oil industry analyst at research firm IHS Markit.

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"The price move today is probably based off Iran and the tight oil supply market that we already have", said Rob Thummel, portfolio manager at energy investment manager Tortoise Capital in Leawood, Kansas. If the U.S. goes it alone as we do not Import Iranian Oilare allies such as Japan and South Korea do and they may switch to other suppliers to comply with the stance of the U.S. On the Natural Gas front the market has been a tough nut to crack.