The oil prices has become steady at $71 as OPEC signaled that it has the ability to fill in the supply gap only if U.S. sanctions are curtailed from shipments from Iran, which is the third largest producer of this group.
On Friday, there was a slide of 0.9 percent by which it can expected that the futures of New York are little changed.
Three members of the Organization of Petroleum Exporting Countries — Saudi Arabia, Kuwait and the United Arab Emirates — together have enough capacity to act as a cushion the U.A.E. energy minister said. Meanwhile, Iran called for clarity over its nuclear deal with world powers, following U.S. President Donald Trump’s withdrawal from the 2015 pact.
Earlier this month, oil had rallied to the highest level in more than three years as Trump’s decision to walk away from the Iranian nuclear accord fueled tensions in the energy-rich Middle East.
The investors are now weighing from OPEC and its allies to see whether they will respond to the situation in Iran by ending an agreement to cut production, or maintain the curbs to further prop up prices.
Vienna based consultant, JBC Energy GmbH, in a form of a note, said, “Even though the reaction to the Iran nuclear-deal situation has been bullish, it can be argued that the market is still somewhat confused. Rhetoric out of Europe, Iran and even OPEC itself in terms of potential supply compensation makes it really difficult to establish a view with a decent degree of conviction regarding timing and size of any supply reduction due to sanctions.”
West Texas Intermediate crude for June delivery traded up 11 cents at $70.81 a barrel on the New York Mercantile Exchange at 8:40 a.m. local time. On Friday, prices dropped 66 cents to $70.70.
Total volume traded Monday was about 15 percent below the 100-day average.
Brent for July settlement advanced 36 cents to $77.48 a barrel on the London-based ICE Futures Europe exchange, after declining 0.5 percent on Friday. The global benchmark crude traded at a $6.70 premium to July WTI.
Futures for September delivery on the Shanghai International Energy Exchange fell 1.2 percent to 465.5 yuan a barrel. The contract closed down 1.1 percent on Friday.
Forecasts for Iranian supply losses vary from “little impact” anticipated by Barclays Plc to declines of 500,000 to 1.5 million barrels a day predicted by the sources.
In a television interview, U.A.E. Energy Minister Suhail Al Mazrouei said “don’t worry about supply,” because OPEC has an adequate “buffer” of potential production to offset barrels lost through renewed sanctions. He serves this year as the cartel’s president.