The price of West Texas Intermediate (WTI) crude rose above $70 a barrel in early trading on Monday for the first time since late 2014 due to global political pressures, reported Reuters.
The light sweet WTI crude rose 0.7% to reach almost $70.2 a barrel, while Brent crude remains firmly above $75 a barrel, at $75.2 a 0.5% spike from the previous close. Analysts have suggested a main driver in the lift in prices is the continued collapse of the Venezuelan oil industry which has seen its output halve in recent years and now stands at 1.5mn barrels per day.
Another key factor is the impending decision by US President Donald Trump regarding the possible re-imposition of sanctions on one of the world’s leading oil producers Iran.
Sanctions were lifted in 2015 due to an agreement over Iran’s nuclear programme and several international oil and gas firms including France’s Total and Russia’s Gazprom and Rosneft have sought to forge deals with Tehran.
Political observers believe it is likely Trump will seek to bring back economic curbs on Iran when he makes his decision on May 12 and this would then have a direct effect on its oil exports.
Meanwhile, US production continues to drive forwards and is now at around 10.6mn barrels per day. Energy services firm Baker Hughes added nine more active rigs to its data tracking the US market last week taking the total to 834, the highest level since March 2015.