Investing.com - Crude oil prices settled lower on Friday as U.S. oil rig counts jumped to a three-year high, raising the prospect of a further expansion in domestic output.
On the New York Mercantile Exchange crude futures for June delivery fell 9 cents to settle at $68.10 a barrel, while on London's Intercontinental Exchange, Brent fell 27 cents to trade at $74.47 a barrel.
Data from energy services firm Baker Hughes showed the number of oil rigs operating in the US rose by 5 to 825, that was third-straight weekly increase.
U.S. production rose to 10.59 million barrels per day last week, the EIA said Wednesday, but that was somewhat offset by a surge in U.S. exports to record high of 2.331 million barrels last week, up more than 30% from 1.749 million barrels the prior week.
Downside momentum in oil prices were limited, however, amid renewed investor expectations the U.S. is set to pull out of the Iranian nuclear deal which would cripple the country’s output, reducing global supplies.
If Trump does scrap the deal, it could lead to the re-imposition of secondary sanctions on Iran, pressuring countries to reduce their purchases of Iranian crude, denting global supplies.
RBC said Friday that the Iran deal “remains on life support,” citing the Iranians as "very unlikely," to satisfy the demands of US President Trump and his “ultra-hawkish” advisors.
“We so not see the deal surviving past summer given the constellation of domestic and foreign forces aligned against it,” RBC said.
The bank added that it expects global inventories to continue to tighten into the summer months – traditionally associated with higher demand.