Oil pares monthly gain as US rigs offset Iran-deal risk

Oil fell as the US oil rig count rose for a fourth week, but was still poised for a second monthly advance. Futures in New York are up 3.8 per cent this month, even after a 1 per cent drop on Monday, following data that showed an increase in US drilling activity. The dollar acted as a further headwind, rising 0.4 per cent. US President Donald Trump faces a May 12 deadline to decide whether to remain part of a 2015 multinational nuclear deal with Iran, or to leave and reimpose sanctions on the Middle Eastern producer.

Oil surged to levels last seen in 2014 as issues including the conflict in Syria and tensions between Saudi Arabia and Iran-backed rebels in Yemen stoked concerns over supply disruptions. French President Emmanuel Macron’s prediction that the US will pull out of the nuclear deal has boosted speculation over reduced shipments from the Islamic Republic. Still, expanding American drilling activity continues to limit price increases. “Obviously the rig count that came on Friday was quite bearish. 

There’s a lot of profit in the books here for the non-commercials. You shouldn’t be surprised if there’s a $5 flush out and some profit taking,” said Torbjorn Kjus, chief oil analyst at DNB Bank ASA.