Published: Tue, July 09, 2019
Markets | By Otis Pena

Oil rises towards $65 as supply concerns outweigh trade disputes

Oil rises towards $65 as supply concerns outweigh trade disputes

"Oil prices are to hold up reasonably well during the coming months or at least they are not to fall out of bed".

While U.S. warned Sunday of more sanctions hitting Iran, the country's oil minister expressed hope crude exports will increase without offering any details.

Benchmark Brent crude climbed 0.9 percent to $64.69 a barrel while U.S. West Texas Intermediate crude futures were up 0.85 percent at $58.14 a barrel.

"I am very hopeful that our oil exports will improve", Zanganeh told state TV, adding that the price of oil was not Iran's main concern.

The US is now the world's biggest oil producer followed by Russian Federation and Saudi Arabia and is set to become a net exporter from 2021, according to the International Energy Agency. -China trade war dampening prospects for global economic growth.

On Tuesday, the Japanese government reported that Japan's core machinery orders fell by the most in eight months. The countries are the world's two largest oil consumers.

"A very cautious open this morning supported by a better than expected (non-farm payrolls)", said Stephen Innes, managing partner at Vanguard Markets in a Reuters report.

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Oil rose towards $65 a barrel on Tuesday as OPEC supply cuts and Middle East tensions outweighed the U.S.

OPEC and non-OPEC producers, known as the OPEC+ alliance, agreed to continue reducing output by 1.2 million barrels a day from late 2018 levels through March 2020, due to a downward revision in 2019 world oil demand and "major challenges and mounting uncertainties related to ongoing trade tensions".

"Geopolitical risks remain plentiful, but the start of the week could see Iran worries ease", said Edward Moya, senior market analyst at OANDA.

Iran on July 8 threatened to restart deactivated centrifuges and step up its enrichment of uranium to 20% in a move that further threatens the 2015 nuclear agreement that Washington abandoned a year ago.

Washington has imposed sanctions that eliminate benefits Iran was meant to receive in return for agreeing to curbs on its nuclear programme under the 2015 deal with world powers. US job growth rebounded strongly in June, with government payrolls surging, a closely watched employment report showed on Friday, suggesting that May's sharp slowdown in hiring was probably a one-off.

President Donald Trump, who pulled the United States out of the deal past year, warned Iran to be careful. -China trade talks came after Presidents Donald Trump and Xi Jinping agreed to a second truce in their trade war last month.

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