Rosneft first-quarter oil output down 1.2 percent because of OPEC deal

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Both oil futures contracts hit their highest since November 2014 last week at 78 dollars and 71.89 dollars a barrel respectively, as markets anticipated a sharp fall in Iranian crude supply once United States sanctions bite later this year.

Brent crude futures were at $78.22 per barrel at 0644 GMT, down 21 cents, or 0.3 percent, from their last close.

Despite these downward forces, the market retains support from OPEC and other producers' production cuts and USA sanctions on Iran.

WTI's June contract was 67 cents higher at $71.63/bbl on the New York Mercantile Exchange as of 8:57 a.m. local time, after rising 26 cents on Monday.

The West Texas Intermediate (WTI) for June delivery was up 35 US cents to settle at 71.31 dollars a barrel on the New York Mercantile Exchange, while Brent crude for July delivery rose 20 cents to close at 78.43 dollars a barrel on the London ICE Futures Exchange. A lot will depend on how other major oil consumers respond to Washington's action against Tehran, which will take effect in November, Reuters reported.

The United States last week withdrew from an global nuclear accord with Iran and announced renewed sanctions against the country.

China, France, Russia, Britain, Germany and Iran all remain in the nuclear accord that placed controls on Iran's nuclear programme and led to a relaxation of economic sanctions against Iran and companies doing business there.

Foreign ministers from the UK, France and Germany will meet with their Iranian counterpart, Javad Zarif, to discuss salvaging an accord that allows Iranian oil exports, after the USA withdrew last week.

Some oil analysts have said they expect Iranian crude exports to fall by as little as 200,000 barrels per day (BPD), while others put the figure closer to 1 million bpd (MMBPD).

Yesterday, OPEC downplayed the impact of the U.S. shale boom, but warned about U.S. trade squabbles.

"The API inventory data in the USA fits with. a topping pattern - or at least a decent pause - for oil prices at the moment", said Greg McKenna, chief market strategist at futures brokerage AxiTrader.

Saudi Arabia, OPEC's de-facto leader, last month pumped the least crude since the output-cut deal began in early 2017. The production growth may be far from over, contributing to US crude´s discount to Brent, analysts said. Fifty-five Palestinians were killed in confrontations with Israeli troops on Monday after tens of thousands converged on the Gaza Strip border to protest the USA embassy in Jerusalem.

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