Crude poised for monthly gain amid Iran nuclear accord prospects

Futures in New York traded close to little changed Monday, yet remain poised for a 4.9% advance this month. A May 12 deadline is looming for U.S. President Donald Trump to decide whether to pull out from an Iran nuclear deal or reimpose sanctions. French President Emmanuel Macron made a joint announcement with the office of Iranian President Hassan Rouhani that the two leaders would work together on preserving the deal.

“They want to try and work out a deal that could be independent of any kind of Trump walk-away,” said Bob Yawger, director of futures at Mizuho Securities USA Inc. in New York. “That gives some hope to the market here that if you take the United States out of the Iran nuclear deal, you may still have some kind of scrappy deal left on the sideline.”

Crude has rallied this month amid heightened geopolitical tensions, and as investors await a decision on the Iran accord. At the same time, OPEC’s production cuts have continued to tighten global markets, despite U.S. crude output hitting fresh records and the number of rigs reaching the highest levels since 2015.

West Texas Intermediate crude for June delivery fell by 9 cents to $68.01/bbl at 10:26 a.m. on the New York Mercantile Exchange. Total volume traded was about 8% below the 100-day average.

Brent crude for June settlement, which expires Monday, added 9 cents to $74.73/bbl on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a $6.67 premium to June WTI. The more-active July contract traded at $74.01.

Macron has put forward a proposal that could improve the situation, and enable everyone to claim victory. Trump should take up Macron’s suggestion, according to Pascal-Emmanuel Gobry, a Paris-based writer who is a fellow at the Ethics and Public Policy Center in Washington.

That would be to treat the existing deal, which covers Iran’s nuclear program, as one leg in a broader accord, Gobry wrote. That could cover nuclear activities beyond JCPOA’s 10-year deadline, ballistic missile technology and, especially, Iran’s sponsorship of terrorism in the region.