Brent Oil rose to fresh 3.5 year highs in the Asian session on expectations of fresh US sanctions against Iran and as the demand side of the oil market continues to strengthen, courtesy of OPEC output cut deal.
Brent oil is changing hands at $74.95/barrel, having clocked a high of $75.20 earlier today.
It appears the investors are pricing in a further tightening of supplies as the US may renew sanction on Iran.
“The United States has until May 12 to decide whether it will leave the Iran nuclear deal and instead renew sanctions against the OPEC member”, according to Reuters.
That said, the oil prices remain bid primarily due to supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC).
Wang Tao, a Reuters market analyst for commodities and energy technicals, writes, “The surge Monday signals a continuation of the uptrend and an extension of the wave 5, the fifth wave of a five-wave cycle from $66.69. The resistance zone of $75.45-$76.34 will pose a great challenge to bulls.”