Oil Pares Monthly Gain as US Rigs Offset Iran-Deal Risk

Rising US rig count knocks oil, but prices remain near 3-year highs

Weekly data on Tuesday that showed a rise in United States crude inventories also subdued the oil price somewhat.

Prior to Israeli Prime Minister Benjamin Netanyahu's disclosure of the Iranian filed, French President Emmanuel Macron made a joint announcement with the office of Iranian President Hassan Rouhani in which the two leaders would work together on preserving the 2015 deal. Prices are being supported by continued adherence to the OPEC-led production cuts, increased demand from Asia, possible supply disruptions in Iran and turmoil in Venezuela.

West Texas Intermediate (WTI) crude for June delivery traded at $67.48 a barrel on the New York Mercantile Exchange, down 62 cents, at 8.23am in London.

Netanyahu's disclosure of thousands of documents he said proved Iran definitively sought to assemble nuclear bombs comes as the US President, Donald Trump, considers whether to re-impose sanctions against Iran, the third biggest oil producer in the Organisation of Petroleum Exporting Countries.

Brent crude for June settlement, which expires Monday, dropped 74 cents to $73.90 a barrel on the London-based ICE Futures Europe exchange.

Brent has risen by around 6.5 percent this month.

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Money managers hold record positions in Brent crude futures and options, lured in by the hefty premium of the front-month June contract over subsequent months that makes it profitable to invest in crude over the longer term.

Brent crude, the worldwide benchmark traded in London, closed at a level not see since late 2014.

Prices will be pressured by rising USA production as shale drillers try to take advantage of higher prices by ramping up activity. Dusaniwsky pointed out that bets against the sector previously hit a year-to-date high of $55.2 billion in mid-January when the benchmark topped $66 a barrel and then swiftly fell to a year-to-date low of $43.1 billion in mid-February when the price of WTI crude plummeted again.

On Friday, the Baker Hughes rig count in the U.S. showed a gain of five rigs in the week to April 27, the fourth consecutive weekly rise, bringing the total rig count to 825.

"That's an issue that is more political in nature that could have a shock in the market", said Mark Watkins, a regional investment manager at U.S. Bank Wealth Management in Park City, Utah". Investors are assessing if surging US production, which has topped 10 million barrels a day every week since early February, will undermine efforts by the Organization of Petroleum Exporting Countries to balance the market via output cuts.

Saudi Aramco, the world's biggest crude exporter, appointed new board members with experience in global oil and petrochemical businesses as it plans a possible overseas share sale in what could be a record initial public offering.

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