China's petro-yuan to gain leverage over Iran sanctions

Russia slams US decision to withdraw from Iran deal

Two days after Donald J. Trump made a decision to withdraw from the Iran nuclear agreement, Zanganeh said the USA president is engaging in "shenanigans" in the oil market - and that he's cut a deal with some members of the Organization of Petroleum Exporting Countries to keep production down and prices high.

"We introduce a second-quarter $US90 a barrel Brent price target for 2019 and see a risk of $US100 a barrel oil next year, although we are concerned that these market dynamics could unfold over a shorter timeframe", BoA strategist Franciso Blanch said.

Last week's news about new sanctions on Iran will be long-term bullish if it leads to a supply shortage as widely expected, however, it may take as many as 180-days before the effects of the cut in supply are actually felt.

Investors are anxious that renewed sanctions on Iran, a major oil producer, could lead to supply disruptions.

Brent crude was down 5 cents at $77.07 a barrel by 0920 GMT.

White House national security adviser John Bolton said US sanctions on European companies that maintain business dealings with Iran were "possible", while Secretary of State Mike Pompeo said he remained hopeful Washington and its allies could strike a new nuclear deal with Tehran.

West Texas Intermediate crude rose 26 cents to settle at $70.96.

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Crude prices fell in a see-saw session on Friday, retreating after early gains as it looked likely that USA allies would push to maintain a deal with Iran, which could keep that country's crude exports on global markets. That would hurt not just Iran's economy but also the dollar's liquidity, as the global oil trade undergirds the greenback, said Edward Al Hussainy, senior analyst, global rates and currency at Columbia Threadneedle in Minneapolis.

Michael Wittner, analyst at Societe Generale, forecasts US sanctions will remove 400,000 to 500,000 bpd of Iranian crude from the global market. The five-year supply average is 420 million barrels.

Brent crude oil futures at one point touched their highest since November 2014 at $76.75 per barrel.

"The market is now focused on OPEC and other producers' ability to react to this potential supply disruption", ANZ bank said on Friday.

OPEC's agreement is built to stretch as far as the end of 2018.

Washington has given European firms doing business in Iran up to six months to wind up investments or risk US sanctions and they are also forbidden from signing any new contracts with Iran.

In other news, the U.S. Energy Information Administration reported that U.S. crude inventories fell by 2.2 million barrels in the week-ending May 4 to 433.76 million barrels.

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