Oil supplies from OPEC sank by half a million barrels a day in March, hitting a four-year low, as Saudi Arabia continued to slash output and Venezuela's production plunged amid ongoing economic crisis. OPEC's output fell by 534,000 bpd in March to 30.02 million bpd, according to independent sources cited by the group in its monthly report. This year, supply from the group has fallen by more than 1.5 million bpd, helping to drive international Brent crude prices 30 percent higher. Saudi output has now fallen by about 1.3 million bpd from its all-time high at 11.1 million in November, when the kingdom's production surged to offset U.S. energy sanctions on OPEC-member Iran. Click Read More below for additional detail.
Several months ago, U.S. President Donald Trump delivered an ultimatum on the Iranian nuclear deal:
“Either fix the deal’s disastrous flaws, or the United States will withdraw.”
Despite clear support from French President Emmanuel Macron, German Chancellor Angela Merkel, UK Prime Minister Theresa May, and the European Union to continue the Joint Comprehensive Plan of Action (JCPOA), popularly known as the “Iran nuclear deal,” and offset a Trump veto, the deal, as it existed on Monday, is now dead.
The stakes are high, but European positions are not enough.
Short term, oil-pricing volatility will continue. Traders will likely consider any forward interruption – perceived or actual – in Iranian crude export flow as upward pressure on global prices.
If this happens and JCPOA is not immediately closed, (i.e., should those second and third possible scenarios I mentioned play out), there will be a pullback.
Overall, other factors have been contributing to an increasing floor for the oil-pricing band, supported by continuing OPEC production problems in Venezuela, Nigeria, and Libya.
more at: https://moneymorning.com/2018/05/09/the-iran-deal-is-dead-heres-what-that-means-for-crude-oil-prices/