Oil surges after U.S. reimposes sanctions on Iran

Oil prices

The oil market had a strong start this week on Monday as prices were somehow given a lift by the declining rig count in the United States. Brent crude gained about a percent following the news that U.S. sanctioned Iran.

U.S. President Donald Trump opposed the idea of the 2015 Iran nuclear agreement last Friday. Both the adversaries and U.S. allies were defied by refusing to certify that Tehran abided with the deal despite the statement of international analysts saying that it is.

President Trump should authorize every 90 days to the U.S. Congress that Iran is following the accord, which the Congress will now have 60 days to decide if it would impose economic sanctions on Tehran again that were emerged below the agreement, all according to the U.S. law. The renewed sanctions of United States versus the nation has supported oil futures.

Looking at its effect on oil prices, the international benchmark for oil futures London Brent crude came in 1.1 percent higher or 62 cents to finish $57.79 per barrel on it last trade. Meanwhile, U.S. West Texas Intermediate prices jumped as high as 0.8 percent or 43 cents to close at $51.88 per barrel.

The price of crude was also underpinned by the movement of United States to reduce its rig count to tap fresh output within the country. According to the reports of Baker Hughes, drillers reduced as much as five rigs in the week until October 13, touching its lowest count since early June with 743 rigs.

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