Oil futures rose Monday after OPEC sources told Reuters Saudi crude production unexpectedly fell in July, raising concerns about global oil supplies as the us prepares to reinstate sanctions against major exporter Iran.
On top of that, Iranian President Hassan Rouhani has threatened to disrupt regional oil production and exports if the Trump administration follows through with oil sanctions.
Additionally, last week, energy information provider Genscape issued a report that suggested crude oil stockpiles at the US storage hub at Cushing, Oklahoma fell in the latest week. The sanctions, which would come into force from November 4, are likely to block current payment routes used to pay for Iranian imports.
"It is a reality check that this is happening and that Iran's oil exports will be hurt when the oil sanctions hit it in November", chief commodities analyst at Commerzbank Bjarne Schieldrop said.
European officials have said their governments are considering opening accounts for Iran at their national banks, which could receive oil payments.More news: Jordan Pickford wants Europe in Silva's first Everton season
Oil has declined about 7 percent from the highs of June as trade tensions between the United States and China imperil economic growth and energy demand.
FGE added, however, that United States would be only filling a part of the void created by a fall in imports from Iran. While the average price for West Texas Intermediate (WTI) crude oil at the New York Mercantile Exchange (Nymex) amounted to US$69.50 per barrel, higher by US$2.36 compared with June 2018. "The reports that Saudi Arabia's production actually dropped in July continue to provide support for the market".
Additionally, there are also reports that many USA shale oil drillers posted disappointing quarterly results in recent weeks, hit by rising operating costs, hedging losses and a drop in crude prices away from 2018 highs reached between May and July.
Iran's oil ministry said last month it doesn't use the Bab el-Mandeb strait at southern end of Red Sea for its crude exports after Saudi Arabia temporarily halted its own shipments through the waterway, due to an attack on two of its tankers.
Output was expected to rise 1.31 million bpd to 10.68 million bpd in 2018, lower than last month's forecast of growth of 1.44 million bpd to 10.79 million, the EIA said.More news: Angelina Jolie accuses Brad Pitt of evading child support
Crude prices have been volatile in recent sessions as the market reacted to an increased supply from OPEC and Russian Federation while weighing the impact of a lack of Iranian barrels in the market due to USA sanctions, analysts said. Nationwide inventories in the USA probably fell 3 million barrels last week, according to a Bloomberg survey of analysts before government data due on Wednesday.
In America, customs will begin collecting duties on 279 product lines of Chinese goods as of 23 August, the US Trade Representative's Office said Tuesday.
Much of the northern hemisphere has been gripped by extreme heat this summer, pushing up demand for industrial and residential cooling.
This mostly impacts demand for power fuels such as thermal coal and natural gas.
This is unedited, unformatted feed from the Press Trust of India wire.More news: Boris Johnson told to apologise over 'totally out of order' burka comments
- Moment man is pulled alive from rubble in quake-hit Lombok
- 2018 primary election: Check back for results from statewide and local races
- Ruby Rose cast as lesbian Batwoman for CW
- Rick Gates Forced Into Admitting Extramarital Affair by Paul Manafort’s Lawyer
- Here's why Elon Musk wants Tesla to go private
- Hiroshima marks 73rd anniversary of atomic bombing - 8/6/2018 12:45:44 AM
- James Anderson's golf swing goes horribly wrong
- Disney’s CEO Gives New Details About The New Disney Streaming Service
- Snapchat lost 3 million daily users in the past three months
- College student includes massive gator in graduation photos