April 30, 2018 / 6:58 AM / 10 months ago

UPDATE 8-Oil gains after Netanyahu says Iran lied after signing nuclear deal

    * Netanyahu says Iran lied after signing nuclear deal
    * U.S. crude output jumps to record 10.26 mln bpd in Feb-EIA
    * Marathon to buy rival Andeavor, creating biggest U.S.

 (Updates prices, adds Iranian reaction to Netanyahu
accusations, adds U.S. crude production data)
    By Ayenat Mersie
    NEW YORK, April 30 (Reuters) - Oil prices rose on Monday,
bouncing off early losses after Israeli Prime Minister Benjamin
Netanyahu said Israel had proof that "Iran lied" about its
nuclear capabilities, and that he was sure U.S. President Donald
Trump would do "the right thing" in reviewing the country's
nuclear deal with western powers.
    Prices of the Brent June contract        , which expires
Monday, gained 53 cents to settle at $75.17 a barrel. Prices for
the more actively traded Brent July contact         gained 90
cents to settle at $74.69.  
    U.S. West Texas Intermediate (WTI) futures        were up 47
cents on the day to settle at $68.57 a barrel.
    Earlier in the session, both benchmarks had been down about
1 percent. Both started to gain after Netanyahu said he would
soon have an announcement regarding Iran. 
    "Oil reacted very severely" to Netanyahu's announcement,
said Phil Flynn, analyst at Price Futures Group in Chicago.    
    Oil prices jumped after Netanyahu said Israel has evidence
that Iran lied about its nuclear program after signing the 2015
agreement with global powers.              
    Iran dismissed Netanyahu's accusations, calling them
    "Netanyahu may be the flavor of the day, but the larger
issue driving this is what will Trump do with Iran? And what
will Iran do in response? And that uncertainty is the
fundamental driver, not so much Netanyahu," said Walter
Zimmerman, chief technical analyst for United-ICAP. 
    Trump has until May 12 to decide whether to restore
sanctions on Iran that were lifted after the international
    Oil prices have risen this month to their highest since late
2014, driven by concern over potential disruptions to Iranian
crude flows. Analysts said the market is extremely sensitive to
any developments on the nuclear deal and sanctions.
    "Until May 12, you're not going to see any significant
downward correction," PVM Oil Associates strategist Tamas Varga
said. "Reimposing U.S. sanctions is not a foregone conclusion
just yet."    
     Meanwhile, U.S. crude production jumped 260,000 barrels per
day (bpd) to 10.26 million bpd in February, the highest on
record, the Energy Information Administration said in a monthly
report on Monday.            
    In the latest development in the U.S. shale boom, Marathon
Petroleum Corp         agreed to buy rival Andeavor          for
more than $23 billion. The largest-ever tie-up between U.S.
refiners will give the combined company a nationwide presence
and increased access to growing export markets. 
    The deal gives Marathon more exposure to U.S. shale, thanks
to Andeavor's existing logistics and terminal operations in
Texas and North Dakota shale regions.             

 (Additional reporting by Amanda Cooper in LONDON, Koustav
Samanta in SINGAPORE; Editing by David Gregorio and Andrea
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