Oil near November 2014 highs firm as markets tighten amid OPEC cuts

OPEC Adds US Exit From Iran Nuclear Deal To 'Disruptive Concerns'

INTERACTIVE: 89% of non-OPEC 2018 supply growth from US – OPEC

On May 8, Donald Trump announced that the USA would pullout from the 2015 nuclear deal between Iran and the P5+1 countries, namely the five permanent member of the United Nations Security Council (China, France, Russia, the United Kingdom and the United States), plus Germany and the European Union.

"In the short term, higher oil prices will probably be sustained", said John Velis, macro strategist at State Street Global Markets, noting multiple reasons for the price support.

US President Donald Trump's withdrawal from a 2015 nuclear accord with Iran has driven oil to the highest since November 2014.

It remains unclear how hard US sanctions will hit Iran's oil industry.

Contrastingly, Opec's latest report was more bullish. "This time around, we expect much less of an impact". Opec has an adequate "buffer" of potential production to offset barrels lost from a re-imposition of Iranian sanctions, he said in an interview with Bloomberg Television.

Iran can shift one million barrels a day of Europe-bound oil exports to Asia, mostly to China and India, Cinda Securities wrote in a note dated May 11.

Storm System in Gulf has Tropical Potential
Due to all the wet weather we had over the weekend and additional rain expected today, flooding will be possible. Development or not, the system will bring rain to Florida and the northeastern Gulf over the next few days.

SEOUL, May 15 (Reuters) - South Korea's crude oil imports from Iran fell 12.1 percent in April from a year ago, while imports of Russian oil more doubled, customs data showed on Tuesday.

OPEC and Saudi Arabia made similar statements past year at the beginning of their initiative to curb oil production, and some pundits took this to be a way to avoid any predictions that could prove wrong of higher oil prices resulting from their cutbacks. Iraq's compliance was at 63%, and it was the only member not to have curbed production as agreed under a deal that took effect January 1, 2017 and is scheduled to run through the end of 2018.

Since late 2017, longer-dated USA oil futures contracts are trading at prices lower than nearer-term contracts, a configuration known as backwardation, indicating that the market at least currently doesn't believe prices will continue to be as high as they are now, longer term.

On Monday, however, markets were held in check by news of a rise in US drilling for new oil production.

Additionally, the market retreated as the U.S. Dollar strengthened against other currencies to the highest since December. "Saudi Arabia appears to be focusing more on pushing up crude higher rather than restoring the balance in oil's supply and demand, and that is underpinning prices".

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