Yet, the comeback in prices was mainly due to extremely strong gasoline and distillate demand plus reports of an unscheduled teleconference meeting with "The Joint Ministerial Monitoring Committee" (JMMC) that was set up with OPEC and Non-OPEC Russia to make sure that there was strong compliance to their oil production cut agreement.
In the wake of these warnings the Japanese banks then notified that they would stop settling transactions related to Iranian Oil.
Crude oil storage tanks are seen from above at the Cushing oil hub, in Cushing, Oklahoma, March 24, 2016.
Elsewhere, the Trump administration is actively considering tapping into the nation's emergency supply of crude oil as political pressure grows to rein in rising gasoline prices before congressional elections in November.
Benchmark Brent crude oil fell $1.07 to a low of $71.83 a barrel before recovering a little to trade around $71.90 by 1045 GMT. Prices yesterday dropped 32 cents to US$72.58.
Iran's OPEC governor, Hossein Kazempour Ardebili, has accused the United States and Saudi Arabia of trying to raise oil prices, saying both countries are acting against the foundation of OPEC. Total commercial petroleum inventories increased by 6.0 million barrels last week.More news: Trump Again Contradicts Intelligence Officials, Says Russia Not Targeting U.S.
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The kingdom told fellow producers on Wednesday that output in July will be in line with June's level of just below 10.5 million barrels a day, people familiar with the matter said.
Since quitting the global nuclear agreement with Iran, the Trump administration has sent conflicting signals, indicating last month that it meant to choke off Iranian crude exports entirely.
The impact of US sanctions on Iran's oil shipments, which remains highly uncertain, will play a big part in determining the final outcome.
The average retail price for a liter of regular stood higher than ¥150 as of Tuesday, hitting its highest in 3½ years, according to the Agency for National Resources and Energy.
He also said that it is this common objective of stabilizing the global oil market that has brought the 25 OPEC and Non-OPEC producers to work together under the historic Declaration of Cooperation, which remains in effect till the end of 2018. Japan has alternatives in Saudi Arabia and UAE among others for its oil needs as it prepares to break its oil alliance with Iran.
USA crude stocks rose by 5.8 million barrels last week, compared with a forecast of a decline of 3.6 million barrels. "If it replaces the lost volumes from Iran and Venezuela, overall supplies will eventually be balanced". Most important, the uncertainty over how the US will treat Iran sanctions has led to a spike in volatility.