Oil dips on signs of ample supply despite OPEC cuts, Iran sanctions

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Brent for July settlement rose as much as $1.24 to $79.47/bbl on the London-based ICE Futures Europe exchange, after increasing $1.11 on Monday.

Oil held gains near $71 a barrel after escalating conflict in the Middle East raised geopolitical risks and as most OPEC members cut output more than required last month.

Another industry player who seems is indifferent to the Iran situation is Dharmendra Pradhan, oil minister for India: he told Bloomberg television that he expects "reasonable" oil prices following sanctions against Iran and that his country as an emerging major economy is open to crude imports from any and all sources.

OPEC and its partners made a decision to extend its production cuts till the end of 2018 in Vienna on November 30, as the oil cartel and its allies step up their attempt to end a three-year supply glut that has savaged crude prices and the global energy industry. Investors are watching whether OPEC and its allies such as Russian Federation intend to end output cuts and increase production if renewed American measures restrict the Persian Gulf state's exports.

Additionally, the market retreated as the USA dollar strengthened against other currencies to the highest since December.

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West Texas Intermediate crude for June delivery was 15 cents higher at $71.11 a barrel on the New York Mercantile Exchange as of 11:36, after rising 26c on Monday.

The surge in oil prices comes at a time of tight supply amid record Asian demand and voluntary output restraint totaling 1.8 MMBPD by the Organization of the Petroleum Exporting Countries and non-OPEC producers, including Russian Federation. Total volume traded Tuesday was about 45% above the 100-day average.

Futures for September delivery rose 1.6% to 472.8 yuan a barrel on the Shanghai International Energy Exchange.

OPEC figures published on Monday showed that oil inventories in OECD industrialised nations in March fell to 9 million barrels above the five-year average, down from 340 million barrels above the average in January 2017. Fifty-five Palestinians were killed in confrontations with Israeli troops Monday after tens of thousands converged on the Gaza Strip border to protest the USA embassy in Jerusalem.

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