Investing.com - Oil prices rose on Tuesday morning in Asia, lifted by concerns that tensions in the Middle East could disrupt oil supplies. Meanwhile, China’s new crude futures kicked off to a roaring start.
Crude Oil WTI Futures for May delivery were trading at $65.78 a barrel in Asia at 11:20PM ET (03:20 GMT), up 0.35%. Brent Oil Futures for June delivery, traded in London, up 0.29% at $69.72 per barrel.
Escalating concerns that the U.S will reimpose sanctions on Iran, which would severely limit Tehran’s ability to export crude oil, have pushed up oil prices.
Further supporting oil markets is Saudi Arabia’s push for production curbs led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia to be extended into 2019, in an effort to prop up oil prices. Iraq, the second biggest producer within OPEC, said on Monday that it also supports the agreement to cut oil output.
However, such a move could face opposition given the relentless increase in U.S. crude production.
U.S. production has already jumped by almost a quarter since mid-2016, to 10.4 million barrels per day (bpd), surpassing top exporter Saudi Arabia and within reach of top producer Russia, which pumps around 11 million bpd. Production curbs from OPEC inadvertently enable the U.S. to take more market share.
Also supporting oil markets are hopes that behind-the-scenes talks between the U.S. and China will prevent a looming trade war between the world’s two biggest economies.
Meanwhile in Asia, Shanghai crude oil futures saw their second day of trading repeating Monday’s high volumes.
Over the first 24 hours of its trading, Shanghai’s spot crude volumes made up 5 percent of the global market, versus 23 percent for Brent and 72 percent for West Texas Intermediate (WTI).
The launch of China’s yuan-denominated oil futures is expected to give the world’s largest energy consumer more power in pricing crude sold to Asia, as well as provide a third global price benchmark alongside Brent and WTI.