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On Friday crude oil fell as U.S. oil rigs continued to rise to its highest level since March 2015 from 10 to 844 rigs.
Crude futures for June delivery on the New York Mercantile Exchange settled at $70.70 a barrel, falling 66 cents.
Brent on London’s Intercontinental Exchange was trading at $77.05 a barrel falling 0.54 percent.
Increase in U.S. Oil Rigs
The increase in U.S. Oil rigs has raised sentiment that there will be an additional ramp up in U.S. output after data released showed that there was as an increase in domestic output which had climbed to an additional 84,000 barrels per day making a total of 10.7 million barrels per day.
U.S. Iran Nuclear Deal
Traders have raised bets that there will be a fall in global crude supplies, after the U.S. decided to pull out of the nuclear deal with Iran on Tuesday.
Commencement of Sanctions on Nov.5
The U.S. has imposed fresh sanctions on countries that import crude oil from Iran. The Treasury Department said that if the countries were willing to make cuts over a six month period to their imports they would be granted relief.
Goldman Sachs said that they believe that the cuts of 250,000 barrels per day over a six months period could support prices of $6.50 a barrel if other OPEC members are on board.
Heightened Tensions in Middle East
The heightened tensions in the Middle East between Israel and Iran grew following the missile attack on Israel by Iran earlier in the week. Israel responded hitting Iranian bases in Syria putting oil prices at a premium.
According to analyst Phil Flynn at Price Futures Group who said that with the increase in demand and the big drops in U.S. oil inventory together with the tensions in the Middle East, there is support in oil prices.