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Oil falls away from multi-year highs on surge in U.S. drilling, Iran sanctions opposition

Reuters  |  SINGAPORE 

By Gloystein

SINGAPORE (Reuters) - prices on Monday fell away from last week's multi-year highs as a relentless rise in U.S. drilling activity pointed to increased output, while resistance emerged in and to U.S. sanctions against major crude exporter

Brent crude futures were at $76.79 per barrel at 0648 GMT, down 33 cents, or 0.4 percent, from their last close.

U.S. Intermediate (WTI) crude futures were at $70.44 a barrel, down 26 cents, or 0.3 percent.

Brent and WTI last week reached their highest since November 2014 at $78 and $71.89 per barrel respectively, as markets expect Iran's exports to fall significantly once U.S. sanctions bite later this year.

"Around a million barrels of a day is likely to disappear from global if the U.S. sanctions on bite," said Greg McKenna, at

"But it is still far from certain that they will bite in the way intended ... has said it will protect its companies from U.S. sanctions, has said French Total has yet to pull out of its fields and all the while it seems the Chinese are ready to fill the void created by the U.S.," he said

Beyond U.S. sanctions, the come amid an already due to record Asian demand and voluntary output restraint aimed at propping up led by the Organization of the Petroleum Exporting Countries (OPEC), as well as a group of non-OPEC producers including

"The (recent) surge in has been due to a number of factors including strong global economic growth, a falling dollar, an agreement between OPEC and to limit production, economic collapse in cutting their production, and bottlenecks in getting U.S. to market," said David Kelly, at

Frederic Neumann, HSBC's co-head of Economics Research, said on Monday that "for a region that imports most of its needs, that (high oil prices) will prove costly."

On Monday, however, markets were held in check by a rise in U.S. drilling for new

U.S. drillers added 10 in the week to May 11, bringing the total count to 844, the highest level since March 2015, firm said on Friday.

"Soaring U.S. shale output will continue to put a cap on prices," said Hussein Sayed, at

(Reporting by Gloystein; Editing by and Joseph Radford)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Mon, May 14 2018. 12:28 IST