Iranian pressure and supply-side concerns surfaced before the opening bell on Monday to push the price of crude oil higher, after some profit taking last week.
The price of oil dropped slightly to end last week, with Brent crude oil, the global benchmark for the price of oil, losing 0.34 percent Friday to close at $74.29 per barrel. That came even after Baker Hughes reported a higher rig count in the United States, an indication that production trends there could accelerate in the future.
Some analysts, however, are worried about the buildup in drilled, but uncompleted wells in the United States. Those types of wells are ones that operators don't yet want to put into production because of market conditions. Even as Brent holds above $70 per barrel, the U.S. Energy Information Administration reported drilled, but uncompleted wells increased 2.5 percent from May to June.
Ole Hansen, the head of commodity strategy at Danish investment firm Saxo Bank, said in response to questions from UPI there were a number of supply-side concerns emerging in the market, from labor strikes in the North Sea, to Saudi tankers avoiding the Bab El-Mandeb waterway after attacks in the Red Sea by the Houthi militia in Yemen.
With the price of oil moving higher in early trading, Hanson said the situation might heat up as concerns about the loss of Iranian oil offset production pledges from Middle East suppliers and Russia.
"The negative impact on demand from current trade war is likely to become a theme in 2019, not now" he added.
Brent was up 0.96 percent as of 9:15 a.m. EDT to $75.48 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 2.3 percent to $70.27 per barrel.
For Iran, one of the largest oil producers in the Organization of Petroleum Exporting Countries, the pressure is taking its toll as some U.S. sanctions snap back into place by Wednesday. In November, those sanctions could sideline millions of Iranian oil barrels from the market, though the nation's economy is already suffering.
During the weekend, the Iranian currency, the rial, hit its lowest point in history, sparking attention from the country's central bank.
U.S. sanctions already target the bank, making it difficult to do business with Iran. On Monday, the new bank chief, Abdolnasser Hemmati, said the downturn was by American design.
"Enemies are out to destroy the country's assets and instill disappointment in public through sanctions," he said.
