Oil prices continue to trade above the US$90 per barrel mark thanks to geopolitical tensions and OPEC’s continued reluctance (or inability) to boost crude production.

But there may be an untapped source that could put a cap on how high prices can go.

Iran’s chief negotiator in its nuclear talks with the US claimed in a recent tweet that the two parties were close to an agreement, which is in line with a report from Bloomberg that officials from the National Iranian Oil Company were in talks with South Korean refiners regarding supply deals.

Should this come to pass soon, it could add some 500,000 barrels of crude oil production per day between April and May, which would likely impose a cap on just how far prices can climb and potentially even knock the bulls down a notch.

Crude oil prices climbed last night on news that US distillate stocks are on course to fall critically low between now and the middle of the year with inventories dropping by another 2 million barrels last week to 120 million barrels, according to the US Energy Information Administration.

With gasoline (petrol for us Down Under) stocks also running lower than normal, Reuters reported this may require refiners to process even more crude, which would in turn tighten global crude inventories even further.

The benchmark Brent crude is up 0.79% to US$92.83/bbl.

Norwegian gas filling European stocks

On the gas front, Bloomberg reported that Norwegian state owned energy company Equinor has committed to maintaining maximum natural gas production rates to help the European Union fill its gas stockpiles.

Low gas stocks were the root cause behind Europe’s gas crisis last year and any action to fill them ahead of the next winter will play a major role in preventing a repeat of the sky high gas prices and desperate scrambling for alternate energy supplies that provoked in 2021.

While this will go some way towards addressing concerns about gas supplies, this still represents less than half of what the EU needs.

This means Europe remains heavily reliant on Russian gas supplies, which impacts on the region’s energy security.