Iran's oil output up 10000 bpd in April: OPEC

Iran's oil output up 10000 bpd in April: OPEC

"Increasing crude oil prices affect the USA economy primarily through two channels: putting downward pressure on consumption by reducing households' non-energy disposable income; and increasing nonresidential fixed investment as oil-related investment activity picks up".

It is unclear how hard USA sanctions will hit Iran's oil industry.

WTI oil prices rose 0.3 percent on Thursday to close at $71.4 per barrel as investors weighed the potential disruption to oil flows from major exporter Iran in the face of USA sanctions.

China, France, Russia, Britain, Germany and Iran all remain in the nuclear accord that placed controls on Iran's nuclear program and led to a relaxation of economic sanctions against Iran and companies doing business there.

The deal between the Organization of the Petroleum Exporting Countries and non-OPEC producers led by Russian Federation to cut supplies and erase a global glut has helped oil prices reach $78 a barrel, their highest level since 2014. The market also contended with concerns about Venezuela's crude production slipping further and with bullish drawdowns in US crude inventories.

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Greg McKenna, chief market strategist at futures brokerage AxiTrader, says it is still "far from certain" that sanctions "will bite in the way intended".

The United States said on Tuesday that it plans to impose new sanctions against Iran after abandoning an agreement reached in late 2015 that curbed Tehran's nuclear activities in exchange for removal of US and European sanctions.

In terms of non-OPEC oil supply, the cartel revised the forecast marginally higher compared to last month's assessment, by 10,000 bpd, and now expects non-OPEC supply growth at 1.72 million bpd year on year in 2018.

Significant influence on oil markets is also the increasing drilling activity in the United States.

According to Baker Hughes, the number of oil rigs in USA was increased by 10 to 844 units last week.