Oil ebbs from multi-year highs on surge in U.S. drilling

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"With prices moving close to $US80 a barrel and with a great opportunity presented to Saudi Arabia and Russian Federation to regain market share without crashing the oil price, we think there is a good chance the current OPEC+ deal will end by the end of 2018, if not before".

Fortunately, the Obama-era sanctions that Trump has moved to reimpose have some lesser-known safety valves should oil markets later overheat as a result of the Iran decision.

"The oil market was underpinned in April by renewed geopolitical issues, tightening product inventories and robust global demand", OPEC said in its report. If OPEC and Russian Federation kept in place their existing oil production cuts for 2018 and beyond, the price could even rise to $US100 before the end of next year, they said.

OPEC output rose by just 12,000 barrels per day (bpd) to 31.93 million bpd in April, according to figures OPEC collects from secondary sources.

Figures reported directly from OPEC members showed even deeper declines in production.

"There are worries that Iran's oil exports could fall by about 1 million bpd from current levels", said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo.

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However, some pundits predict shale oil - oil produced from rock fragments - could again flood the market as it did in 2014, which would help alleviate the pressure.

He tweeted on Tuesday that "Donald Trump simultaneously lied about the Iranian nuclear deal, undermined global confidence in US commitments, alienated our closest allies, strengthened Iranian hawks, & gave North Korea more reason to keep its nukes".

"I think at the moment there's some feeling in Europe - they're really surprised we got out of it, really surprised at the reimposition of strict sanctions".

"Fast-growing USA tight oil production is increasingly faced with costly logistical constraints in terms of outtake capacity from land-locked production sites", OPEC said.

President Donald Trump is preparing to impose new sanctions on Iran, the White House said on Wednesday, following the U.S. withdrawal from the multinational 2015 agreement that stalled Iran's nuclear programme. Saudi Arabia said last week it was ready to offset any shortage but would not act alone.

Trying to ease market concerns, Saudi Arabia on Wednesday said it would work with other producers to lessen the impact of any shortage in oil supplies.

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