Oil Prices Climb Ahead of US Sanctions on Iran
- by Johnnie Parks
- in Money
- — Sep 13, 2018
Crude oil prices gained traction on Tuesday and finally staged a decisive recovery with the barrel of West Texas Intermediate breaking above the $69 mark.
Brent rose above $80 per barrel on Wednesday for the first time since May, spurred by expectations that USA sanctions against Iran's oil exports, which will start in November, will tighten global markets.
Since spring, when the Trump Administration said it would impose sanctions on Iran, traders have been focusing on the impact they could have on global supply.
Brent crude futures rose US$1.69, or 2.2 percent, to settle at US$79.06 a barrel.
"It was a mixed performance in the crude oil market", said ANZ bank in a note, pointing to Washington's sanctions against Iran's oil exports that will be enforced from November.
More news: Majority of Puerto Ricans give Trump negative rating on Hurricane Maria responseWashington has told its allies to reduce imports of Iranian oil and several Asian buyers, including South Korea, Japan and India appear to be falling in line.
Novak said global oil markets were "fragile" due to geopolitical risks and supply disruptions.
But the US government does not want to push up oil prices, which could depress economic activity or even trigger a slowdown in global growth.
Russia, the United States and Saudi Arabia are the world's three biggest oil producers by far, meeting around a third of the world's nearly 100 million barrels per day of daily crude consumption.
Combined output by these three producers has risen by 3.8 million bpd since September 2014, more than the peak 3 million bpd Iran has managed during the last three years.
More news: Man arrested after breakfast with woman in Saudi Arabia ZlotoNewsAlexander Novak, Russia's energy minister, warned of the impact of the United States sanctions against Iran, which come into force in... Novak did not provide details.
Iran has started to store oil in its own tankers off its coasts ahead of the USA sanctions on its oil exports that are expected to cut Tehran's ability to ship and sell oil to customers around the world.
The Wall Street Journal said OPEC's total oil production climbed last month, in a sign the oil cartel is sticking with a decision to begin pumping out more barrels of crude this summer after more than a year of holding back output.
USA companies in China are being hurt by tariffs in the growing trade war between Washington and Beijing, according to a survey, prompting US business lobbies to urge President Donald Trump's administration to reconsider its approach.
U.S. crude stocks fell by 8.6 million barrels in the week to September 7 to 395.9 million, the American Petroleum Institute (API) said on Tuesday, while the U.S. Energy Information Administration (EIA) cut its forecast for U.S. crude output growth in 2019.
More news: Hurricane Florence: Storm force winds for North Carolina within hours
