US oil cracks $70, dollar heads towards 2018 high

U.S. stocks moved broadly higher in early trading Monday adding to solid gains at the end of last week

Recent price action suggests that investors have not yet concluded pricing in further risk premium as we edge closer to the May 12th deadline Trump has set himself to decide whether the United States will remain in the 2015 Iran nuclear deal, and any comments Trump makes in the lead up to the event have the potential to encourage fireworks in the oil markets.

U.S. West Texas Intermediate (WTI) crude futures rose 84 cents to $70.56 per barrel. Eastern Time. The Dow Jones industrial average gained 187 points, or 0.8 percent, to 24,450.

Global oil demand expanded by 1.5 million barrels per day previous year, thanks to a rebound in USA gasoline demand from drivers of SUVs and light trucks.

President Hassan Rouhani said on Sunday Iran had plans to respond to any move by Trump and the us would regret a decision to exit the accord.

Iranian Oil Minister Bijan Namdar Zanganeh claimed that the ongoing rise in oil prices the result of "manufactured tensions", adding however that Tehran does not advocate the current price hike and instead supports "reasonable prices", according to the Ministry's news agency SHANA.

Oil prices have surged by double digits since early February, as President Trump has indicated the USA might withdraw from the global pact with Iran, under which Iran agreed to curb its nuclear program in return for sanctions relief. The global benchmark crude, which is also on course for the highest close since November 2014, was at a US$5.29 premium to July WTI. A decision is due by Saturday on whether the US will renew the waivers for some USA sanctions on Iran's oil exports.

Meanwhile, Brent crude futures, the benchmark for oil prices outside the US, tacked on 56 cents, or 0.8%, to $75.42 a barrel, after climbing to $75.89 earlier in the session, its highest since November 2014.

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Crude at US$60 to US$65 a barrel is "suitable", an Iranian official said on Sunday, signaling a split with fellow OPEC member Saudi Arabia, which is said to be aiming for US$80 oil.

Yuan-denominated futures for September delivery rose 2.9 percent to 460 yuan (US$72.27) per barrel on the Shanghai International Energy Exchange. The contract climbed 0.6% last week.

While refusing to reveal what he will do on Saturday, Trump reiterated his belief the existing accord is "a awful agreement for the United States", but "that doesn't mean I wouldn't negotiate a new agreement".

On Monday, Saudi Arabian Energy Minister Khalid al-Falih said he is concerned about low oil industry investment and potential shortages in the future.But U.S. output has soared by more than a quarter in the last two years, to 10.62 million bpd.

Meanwhile, the US' European allies continue to back the deal, saying it has been essential to reining in Iran's nuclear program.

Since sanctions were eased in January 2016, Iran's crude production has almost doubled, while exports last month soared to record levels.

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