Oil prices respond to U.S. move on Iran with surge | UPI.com

Global spare capacity is at a premium. Late Tuesday, the American Petroleum Institute reported U.S. commercial crude oil inventories declined 1.8 million barrels last week, far greater than the 400,000 barrel drop forecast by commodity pricing group S&P Global Platts. While the United States is producing more oil, it’s also exporting more.

Extra supplies from the Organization of Petroleum Exporting Countries, meanwhile, are short because of an agreement to limit production to erase a previous surplus. Paul Hickin, the oil director at commodity pricing group Platts, told UPI that, with Iranian oil on its way out and Venezuela production at historic lows, OPEC may have to review its objectives.

“OPEC and its allies will need to confront sooner rather than later the fact the terms of the deal will need to be changed in order to maintain the current cooperative framework if it wants to stay true to its balanced market goal,” he said.

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Oil prices respond to U.S. move on Iran with surge – UPI.com.