Published: Sun, September 16, 2018
Markets | By Otis Pena

Oil prices rise as U.S. sanctions on Iran squeeze supply

Oil prices rise as U.S. sanctions on Iran squeeze supply

Meanwhile, August noticed OPEC's rude supply hit a nine-month excessive of 32.63 million bpd, no matter concerns over falling production and slashed derive admission to in most important producers Venezuela and Iran.

The Category 4 hurricane is due to make landfall in the Carolinas and Virginia later this week and could last multiple days.

Oil prices rose more than 2 percent on Tuesday as US sanctions squeezed Iranian crude exports, tightening global supply despite efforts by Washington to get other producers to increase output.

USA crude futures rose 61 cents to $69.86 a barrel.

In its monthly report, the cartel said total oil demand for 2018 is estimated at 98.82 million barrels a day.

Iran has already started to see the impact of the returning USA sanctions, not only on its crude oil exports, but also on its oil product flows.

United States crude inventories were forecast to have fallen for a fourth consecutive week last week, according analysts polled ahead of reports from industry group the American Petroleum Institute (API) at 8.30pm GMT and the U.S. department of energy on Wednesday.

"They (South Koreans and Japanese refiners) need to find replacements for their drop in Iran imports and a fair amount of that is coming from the States".

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According to the IEA, global oil supply grew by a record 100 million barrels per day (bpd) in August.

The Indian media outlet reports that Wells said the sanctions that come into force on 4 November were created to bring Tehran to book and non penalize India, which meets 83% of its crude oil requirements from outside.

"We think oil market fundamentals are increasingly supportive of crude prices, at least at current levels", said Gordon Gray, HSBC's global head of oil and gas equity research.

U.S. Midwest crude oil inventories fell to 105.9 million barrels last week, the lowest weekly level since January 2015, EIA data showed. The report provides further indication the rapid oil demand that helped Opec and allies get rid of a supply glut will moderate in 2019. The EIA expects Brent crude to average $73.68/b in 2019.

Japan and South Korea were among the first major Iranian clients to bow to USA pressure and cut orders from Iran, the third-largest producer among the Organization of the Petroleum Exporting Countries, with South Korea importing its last cargoes in July, the trade data showed. Iranian oil exports should go from about 2.7 million bpd-2.8 million bpd from earlier this year to about 1 million bpd-1.2 million bpd by the end of this year, Sen told CNBC earlier this month.

Should markets overheat and prices spike, Novak said Russian Federation could raise output. Oil production has been hit by attacks on oil facilities and blockades, though past year it partially recovered to around one million barrels per day.

The U.S. Energy Information Administration has released the September edition of its Short-Term Energy Outlook, increasing its forecast for 2018 ethanol production, but lowering its estimate for 2019 production.

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