Oil on the rise as WTI bucks over $70 on supply concerns

• Crude is on the rise as supply constraints send the black stuff soaring.
• The US wants the rest of the world to help them embargo Iranian crude oil, at a time when Canada and Libya are both struggling to bring product to market.

Oil is climbing once again this week, with the WTI crude prices rising back above the key 70.00/barrel level, fueled by supply constraints in both Canada and Libya, while the US pushes for other nations to join the US in snubbing Iranian oil exports beginning in November.

US officials are warning trade partners that they should cut imports of Iranian oil starting in November as the US attempts to force the re-imposition of trade sanctions against Iran after US President Trump withdrew  US support from the Iranian nuclear deal.

Libya is expected to continue hampering the oil supply chain, with the current government and rebel factions tussling over control of the country’s oil reserves, throwing doubt over the country’s ability to provide crude to global markets. In Canada, 350 thousand bpd  is currently in limbo following an accident that sees a critical oil sands upgrader out of commission, throwing a noticeable kink in US supply lines.

The American Petroleum Institute (API) noted a 9.2 million barrel reduction in US oil stocks on Tuesday, and the OPEC’s recent announcement that they will increase production limits to make up for the supply constraint, although OPEC’s Saudi Arabia is looking eager to begin pumping more oil, with the country looking to produce 11 million bpd  in July, up from June’s target of 10.8 million bpd.

WTI levels to watch

WTI’s climb back over the key 70.00 level sees crude on pace to challenge the year’s previous high at 72.80 in May, and a climb into the 73.00 region would be a new three-year high for oil, while a turnaround from here would face support from last week’s low at 63.35, with April’s low at 61.80 waiting further beyond.