Oil at $100 is a possibility next year, Bank of America says

Venezuela Oil Rig

They urged the U.S. to ensure that the structures of the JCPOA remained intact, and to "avoid" taking action which "obstructs" its full implementation by all other parties to the deal.

On the Shanghai International Energy Exchange, futures for September delivery gained 2.3 percent thus maintaining its winning streak for the fourth day.

Meanwhile, West Texas Intermediate crude for June delivery gained 70 cents to hit $71.84 per barrel at 7.41 a.m. London time on the NYMEX.

"Trump once again showed that the world community should not trust the USA as it shows no respect to the worldwide law", Boroujerdi said on Wednesday a day after the United States announced it will pull out of the nuclear deal with Iran. The move was widely expected, and the White House immediately prepared to sanction Iran and companies that do business there. "Overall the market still looks poised for higher levels".

However, Stephen Innes, head of Asia-Pacific trade at OANDA, said, "We could be on for significant knee-jerk reaction (sending prices down) if the president walks back the more boisterous elements of hawkish Iran rhetoric".

Many analysts in Europe said they are dismayed by Trump's decision, which they said has unnecessarily put global security at risk and raised the prospect of a risky confrontation with Iran. While investors are still assessing the full impact of the US withdrawal from the nuclear accord, UBS Group AG said the sanctions could cut Iran's oil exports by as much as 500,000 barrels a day in the next six months. Sales to Europe are seen by analysts as the more likely to be reduced by the sanctions. Those EU efforts ultimately yielded a political agreement with Washington that effectively shielded European companies from enforcement action by the U.S.

Russian Federation and China have also reaffirmed their commitment to the JCPOA, but to convince Iran to stick with the deal, the Europeans will need to demonstrate that they can still deliver most of the economic benefits that Tehran was promised in exchange for giving up its nuclear weapons program and allowing a robust system of global inspections. The other nuclear states are Russian Federation, the U.S, France, China, the U.K., Pakistan, India and North Korea. They will grumble and accept it. "There is no one who will realistically choose Iran over the U.S.", said energy consultancy FGE.

During the last round of sanctions prior to the nuclear deal, Iran's oil supplies fell by around one million barrels per day. "As before, it may take several rounds of reductions to reach target levels", FGE's founder and chairman Fereidun Fesharaki wrote in a note.

But Kloza sees relief in the future because oil production is booming in the U.S. The E.I.A. projects domestic crude production will rise to almost 12 million barrels a day in 2019 - that's a million more barrels of oil a day than the country is expected to produce this year.

"The oil supply/demand balance is roughly in balance now, but it could turn to a complete supply shortage (in case of new supply curbs)".

"This time it's different, because there is no consensus, it is not taken for granted that other countries will also impose sanctions", said Hakimian.

Outside OPEC, soaring USA crude oil production could help to fill Iran's supply gap.

To be able to continue to purchase Iranian oil while sanctions were in place, China, for example, established the Bank of Kunlun to handle Chinese payments.

The EIA on Tuesday raised its forecast for US output in its monthly report to 12 million bpd late next year.

If the latter argument prevails, President Trump's decision may in fact have finally provided OPEC and Russian Federation, which in 2016 had expected their effort to take just six months, with an exit strategy. The fact is that Iran remains the world's largest state sponsor of terrorism.

This story has not been edited by Firstpost staff and is generated by auto-feed.

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