Oil prices steadied on trading in Monday after slipping early in the session on reports that US drillers added 5 oil rigs last week.  BP photo.

Brent oil prices up over 1 per cent Monday

Oil prices rebounded from losses early in the session on Monday after Israeli Prime Minister Benjamin Netanyahu said Israel has proof that “Iran lied” about its nuclear weapons capability after Tehran signed the 2015 agreement.

According to Reuters, Netanyahu added that he was sure US President Donald Trump would do “the right thing” when reviewing the deal Iran signed with a number of western powers.

By 3:30 p.m., EDT, Brent crude was up 1.12 per cent, or 83 cents to $74.62 and US WTI rose 39 cents to $68.49/barrel.  The Canadian Crude Index climbed 2.24 per cent, or $1.11, to $50.76.

Phil Flynn, analyst at Price Futures Group in Chicago told Reuters “Oil reacted very severely” to the Netanyahu announcement.

President Trump has given Congress and European allies until May 12 to “fix” the agreement or he says his administration with restore crippling sanctions against Iran.
In April, oil prices rose to their highest level since late 2014, mostly due to geopolitical concerns, including the disruption of Iranian crude exports should the sanctions relief be revoked.

“Until May 12, you’re not going to see any significant downward correction,” PVM Oil Associates strategist Tamas Varga told Reuters. “Reimposing U.S. sanctions is not a foregone conclusion just yet.”

Oil prices initially faltered on Monday following the release of data by Baker Hughes on Friday that showed the US oil rig count had risen again.  In the week ending April 27, the US rig count hit 825, the highest since March 2015.

The US Energy Information Administration reported US crude production hit another record high of 10.59 million barrels per day.

Marathon Petroleum has agreed to purchase Andeavor for over $23 billion.  When the deal is complete, the merger will give the combined company a nationwide  presence and will boost its access to export markets.

As well, Andeavor’s existing logistics and terminal operations in Texas and North Dakota shale plays will help Marathon increase its exposure to US shale.