Investing.com - Oil prices held steady on Friday morning in Asia amid ongoing concerns over possible Iran sanctions and increasing U.S. crude production.
Crude Oil WTI Futures for June delivery were trading at $68.42 a barrel at 11:30PM ET (03:30 GMT), down 0.01%. Brent Oil Futures for June delivery, traded in London, were flat at $73.62 per barrel.
Iran’s foreign minister said on Thursday U.S. demands to change its 2015 nuclear agreement with world powers were unacceptable.
Investors are worried about oil supplies after Iran took a tough stance in its response to the U.S., as a deadline set by President Donald Trump for European powers to “fix” the deal loomed.
Trump will decide by May 12 whether to re-impose sanctions on Tehran, which would likely result in a reduction of its oil exports and tighten global supplies. Iran is OPEC’s third-largest producer.
Iran resumed its role as a major oil exporter in January 2016 when international sanctions against Tehran were lifted in return for curbs on Iran’s nuclear program. Iran’s oil exports hit 2.6 million bpd in April, a record since the lifting of sanctions, with China and India buying more than half of Iran’s oil.
Meanwhile, swelling U.S. crude supplies are capping price gains.
U.S. crude inventories jumped by 6.2 million barrels to 435.96 million barrels in the week to April 27, marking a 2018 high.
U.S. crude production has also soared more than 25% since mid-2016 to a record 10.62 million barrels per day (bpd). The U.S. now pumps more crude oil than top exporter Saudi Arabia. Only Russia currently produces more, at around 11 million bpd, which the U.S. is expected to surpass by 2019.
A rising rig count in the U.S. also indicates more crude production in the future. U.S. drillers added five oil rigs in the week to April 27, bringing the total count to 825, the highest level since March 2015.
Despite this, OPEC-led supply cuts, strong global demand and geopolitical uncertainties continue to prop up prices.
Meanwhile, Shanghai Crude Oil WTI Futures for September delivery were up 1.08% at 447.40 yuan ($70.49) per barrel at 11:30PM ET (03:30 GMT) on Friday.