Investing.com - Oil prices slid on Friday morning in Asia as the dollar rose to a new high to above the 91 mark.
Crude Oil WTI Futures for June delivery were trading at $67.94 a barrel at 12:23PM ET (04:23 GMT), down 0.37%. Brent crude futures for June delivery, traded in London, were also down 0.35% at $74.48 per barrel.
The dollar against a basket of currencies hit its highest since mid-January. A stronger greenback makes it more expensive to buy dollar-denominated commodities like oil, thus dampening demand and holding prices back from rising further.
Oil prices rose yesterday as traders worried that the U.S. will re-impose sanctions against Iran.
As Iran is the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), sanctions on the nation could tighten global oil supplies.
French President Emmanuel Macron said on Wednesday during a state visit to the U.S. that he expected Trump to pull out of a deal with Iran reached in 2015, in which Iran suspended its nuclear program in return for western powers lifting crippling sanctions.
A day after, a top adviser to Iran’s supreme leader said Tehran would not accept any change to the 2015 nuclear deal.
The U.S. has until May 12 to decide whether it will leave the nuclear deal with Iran and impose new sanctions against Tehran, which would likely result in a reduction of its oil exports.
And not only is there the possibility of sanctions on Iran, there’s also the possibility of Venezuelan and Russian sanctions.
Venezuelan oil output has already tumbled 40% in two years due to political and economic turmoil, and the European Union said earlier this month it could impose further sanctions on Venezuela, OPEC’s largest producer in Latin America, if it believes democracy is being undermined there.
In addition to the geopolitical uncertainties, OPEC-led supply cuts and strong global demand continue to prop up prices.
By end-April, China will likely have taken in more than 9 million barrels per day (bpd) of crude – its most ever and nearly 10% of global consumption.
Meanwhile, Shanghai crude oil futures for September delivery were trading at 442.10 yuan ($69.80) per barrel, up 0.61%.