Asia buyers to receive more Saudi oil ahead of Iran sanctions

Lloyd Doyle
September 16, 2018

The International Energy Agency said Thursday that the global oil supply reached 100 million barrels a day for the first time ever, boosted by rising production in the USA and several OPEC nations.

Oil traders were also watching the progress of category 4 Hurricane Florence, which is expected to make landfall in the USA by Friday.

Further dashing USA hopes of crushing Iranian oil exports have been recent announcements from Iran's top two customers, China and India, that they would continue to import Iranian crude despite the looming threat of us sanctions.

U.S. West Texas Intermediate (WTI) crude CLc1 futures rose $1.12 to settle at $70.37 a barrel, a one-week high.

Europe's largest bank is the latest global institution to revise its oil price assumptions as concerns grow over how Iranian crude will be replaced by the market once United States sanctions come fully back into force in November.

Prices slipped again after U.S. President Donald Trump said in a tweet that the United States was under no pressure to make a trade deal with China, Yawger said.

Asian consumers of oil have begun to reduce purchases of Iranian oil and South Korea has reduced its imports Iranian crude to zero, on direct orders of the White House. This will hurt the Iranian economy but it shouldn't have a huge effect on the oil market because it won't derail production or exports.

"This is huge uncertainty on the market - how the countries, which buy nearly 2 million barrels per day of Iranian oil will act".

Iran faces a potentially crushing loss of oil exports when USA sanctions return in November, but the impact could be blunted by its experience of working around embargoes.

Gordon Gray, HSBC's global head of oil and gas equity research, told CNBC: "While we aren't explicitly forecasting Brent to rise to $100 a barrel, we see real risks of this happening". Brent rude prices fell in August however extra fair lately rose to 2-month highs round $eighty a barrel.

US crude oil production C-OUT-T-EIA fell by 100,000 bpd, to 10.9 million bpd, as the industry faces pipeline capacity constraints. The report provides further indication the rapid oil demand that helped Opec and allies get rid of a supply glut will moderate in 2019.

On a quarterly basis, the EIA now predicts ethanol production will average 1.06 million barrels per day during the third quarter of 2018, falling to 1.04 million barrels per day during the fourth quarter of the year. These exports set a new monthly benchmark of 2.2 million b/d in June.

Over the past weeks, Iran's oil product exports have also started to take a hit, according to Platts data and sources.

Iraq, OPEC's 2d-greatest producer which noticed method-file production in August at four.65 million bpd, is at the moment witnessing violent protests in and round Basra, which hosts the bulk of its oil production facilities and its greatest deepwater port. Demonstrators receive blocked roads and threatened to close down oil facilities in boom in opposition to failed speak products and providers, unemployment and political corruption.

Should markets overheat and prices spike, however, Novak said Russian Federation could boost its output.

The IEA reported that global oil demand growth for 2018 and 2019 are unchanged, remaining at 1.4 million bpd and 1.5 million bpd, respectively.

EIA forecasts USA crude oil production will average 10.7 Mmbpd in 2018, up from 9.4 Mmbpd in 2017, and will average 11.5 Mmbpd in 2019.

Other reports by Iphone Fresh

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