Oil Rises as 'Alarm Bells' Sound Over Unraveling Iran Nuke Deal

The World Bank in its latest forecast said global prices of crude oil, gas, and coal will rise by 20 percent this year.

Prior to Israeli Prime Minister Benjamin Netanyahu's disclosure of the Iranian filed, French President Emmanuel Macron made a joint announcement with the office of Iranian President Hassan Rouhani in which the two leaders would work together on preserving the 2015 deal.

Helping to limit losses are a number of factors including a reported drop in Angola production, continued threats by Houthis to Saudi oil and shipping and infrastructure, but most of all the possibility of the reimposition of sanctions against Iran.

Netanyahu's disclosure of thousands of documents he said proved Iran definitively sought to assemble nuclear bombs comes as the US President, Donald Trump, considers whether to re-impose sanctions against Iran, the third biggest oil producer in the Organisation of Petroleum Exporting Countries.

U.S. West Texas Intermediate crude for June delivery was 87 cents down at $67.70 a barrel, after settling 47 cents higher on Monday. Total volume traded was about 17 per cent below the 100-day average. Prices are up 5.2 per cent for the month.

Brent crude, the worldwide benchmark traded in London, closed at a level not see since late 2014.

Traders are unwilling to sign contracts for Iranian crude and refined products that would be valid after May 12, the deadline for Trump to decide whether to reimpose sanctions, according to recent interviews with six companies that buy and sell oil in the Middle East. The global benchmark crude traded at a $6.43 premium to June WTI.

According to General Electric's Baker Hughes energy services firm, USA drillers added five oil rigs in the week to April 27, bringing the total count to 825, the highest level since March 2015.

"It's only Trump who wants to back out of the deal, but he wants to back out of so many deals ..."

On Friday, the Baker Hughes rig count in the U.S. showed a gain of five rigs in the week to April 27, the fourth consecutive weekly rise, bringing the total rig count to 825.

Venezuela's plunging output and looming USA sanctions against Iran come against a backdrop of strong demand, especially in Asia, the world's biggest oil consuming region.

Crude oil stocks rose by 2,170 MBBL last week to 429,737 MBBL, from 427,567 MBBL.

USA crude inventories likely rose by 1.3 million barrels last week, while gasoline and distillate stockpiles fell, a preliminary Reuters poll showed on Monday ahead of data by the Industry group the American Petroleum Institute later in the day.

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