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May 1 (UPI) -- Anticipations of a build in U.S. crude oil inventories and reconsideration of an Iranian risk premium sent oil prices lower in early Tuesday trading. The price for Brent crude, the global benchmark, started trading early Monday down about 1 percent. That reversed course later in the session after Israeli Prime Minister Binyamin Netanyahu, following weekend meetings with the U.S. secretary of state, claimed Iran has a secret nuclear weapons program.
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That matters for the price of oil because if U.S. President Donald Trump doesn't issue a sanctions waiver for Iran by May 12, the U.N.-backed nuclear deal with Iran will collapse and take about a million barrels of oil per day with it.
Hasnain Malik, the head of equity research at the developing markets investment bank Exotix Capital, said the Israeli prime minister was likely trying to shape U.S. public opinion with his presentation.
"To the degree this makes it easier for U.S. President Trump to scupper the deal and it raises the ultimate probability of restrictions on Iranian oil exports: positive for the oil price and asset prices in oil exporter countries but negative for regional and global geopolitical risk," he said in commentary emailed to UPI.
On Tuesday, the International Atomic Energy Agency, the U.N.'s nuclear watchdog, issued its own statement saying there was no evidence to suggest Iran had ambitions to build a nuclear weapon after 2009.
The price for Brent crude oil was down 0.71 percent to $74.16 per barrel as of 9:15 a.m. EDT. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 0.79 percent to $68.03 per barrel.
The trajectory was supported by a report from commodity pricing group S&P Global Platts that showed most analysts are anticipating build of 1.8 million barrels of oil in the U.S. market. That would follow a steady increase in exploration and production activity and ease some of the pressure building up because of concerns about a market deficit.
Some of the impact, however, may be dampened by a decline in U.S. gasoline stocks of about 1 million barrels, compared with a historic average of 175,000 barrels in spare capacity. Platts data will be compared later in the week to figures from the American Petroleum Institute and the U.S. Energy Information Administration.
For the supermajors, British energy company BP said its production trends supported one of its best quarters in nearly four years, though it warned that might not continue.
"Looking ahead, we expect second-quarter reported production to be lower than the first quarter reflecting the expiration of the Abu Dhabi offshore concession and seasonal turnaround and maintenance activities," it said in its first quarter earnings report.
