Crude Prices Jump Amid Saudi-Iran Tensions

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Meanwhile, US crude oil production, which for the week ending March 9 increased to 10.381 million bpd is a sober reminder that OPEC's best foot forward in the fight against the inventory overhang will not go unchallenged, despite being propped up in part by floundering Venezuela.

On Tuesday afternoon, the West Texas Intermediate (WTI) and Brent, two major oil price benchmarks, went up over 2.2 percent to 63.54 US dollars and 67.33 dollars respectively. The April contract expires at the day's settlement. The contract climbed $1.09, or 1.7 percent, to $66.21 on Friday.

Brent crude futures were at US$65.87 per barrel, down 34 cents, or 0.5 per cent.

Oil has been trading in a tight range near $60 this month as investors assess a shale boom, concerns about a trade war sparked by U.S. President Donald Trump and expectations that Venezuelan output will plunge.

The U.S. rig count, an early indicator of future output, is much higher than a year ago as energy companies have boosted spending.

The declines come on the heels of a deep economic crisis in the country.

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Net U.S. crude imports fell last week by 594,000 bpd. USA inventories are expected to rise again this week.

The International Energy Agency said last week that Venezuela, where an economic crisis has cut oil production by nearly half since early 2005 to well below 2-million barrels a day, was "clearly vulnerable to an accelerated decline", and that such a disruption could tip global markets into deficit despite soaring USA output.

However, there is one important factor that could curb the oil price's advance: a continuing rise in USA output that so far shows few signs of tailing off.

Looking at U.S. crude oil stocks, the most recent EIA figures (March 4) showed rising crude oil stocks and falling gasoline inventories.

In addition, United States crude stocks fell by 2.7 million barrels in the week ended March 16 to 425.3 million as refineries boosted output, according to the American Petroleum Institute. Saudi Arabia is threatening an arms race with Iran.

The possibility that the US could renew sanctions on Iran would hamper output from the country.

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"You still have geopolitical considerations and possible US action on Iranian sanctions. that is going to be relatively prompt, in May", Petromatrix strategist Olivier Jakob said.

Saudi Arabia's Crown Prince Mohammed bn Salman arrived in Washington for a state visit, raising market-speculation the United States could re-impose sanctions on Iran, following renewed-criticism of the 2015 nuclear-deal.

In other energy trading, April natural gas rose 0.6% to $2.666 per million British thermal units.

Meanwhile, Saudi Arabia scaled back plans for a public offering for oil giant Aramco, saying it will list exclusively on the Saudi stock exchange (http://www.marketwatch.com/story/saudi-arabia-scales-back-plan-for-aramcos-massive-ipo-2018-03-19) next year. April gasoline gained 2.4% to $1.972 a gallon.

- Biman Mukherji contributed to this article.

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