OPEC puts Iran's September oil output at 3.447m bpd

Lloyd Doyle
October 13, 2018

USA crude futures continued to drop for second day, losing $1.88 to $71.29 per barrel in midday trade, as global stock markets fell, with investor sentiment made more bearish by a bigger-than-expected US crude inventories build.

Brent crude futures fell $2.10, or 2.5 per cent, to $80.99 a barrel.

U.S. West Texas Intermediate (WTI) crude CLc1 futures were down by 91 cents, or 1.2 per cent, at $72.26, having also fallen to their lowest since September 27.

Crude supply is also a concern in the Middle East. Iran's crude exports fell further in the first week of October, according to tanker data and an industry source, as buyers sought alternatives ahead of US sanctions that take effect on November 4.

Goldman Sachs reckons USA shale oil production can continue to increase by 1 million bpd every year until 2021 at the earliest, according to a new report by the investment bank. Brent crude reached a four-year high of $86.74. Total oil demand for the year is now pegged at 98.79 mb/d.

The Organisation of the Petroleum Exporting Countries cut its forecast of global demand growth for oil next year for a third straight month, citing headwinds facing the broader economy from trade disputes and volatile emerging markets.

Oil prices fell as United States stock markets skidded on Wednesday, with the S&P500 stock index marking its biggest one-day fall since February. "As a result, Indian refiners will increase dependence on the remaining Middle Eastern crude oil suppliers (mainly Saudi Arabia and Iraq), aside from Iran", Moody's has said recently. While Iran's output fell by 150,000 barrels a day and Venezuela lost 42,000 barrels a day, Saudi Arabia and Libya more than offset the decline.

Companies turned off daily production of about 670,800 barrels of oil and 726 million cubic feet of gas by midday on Tuesday, according to the federal offshore regulator, the Bureau of Safety and Environmental Enforcement (BSEE).

US light crude dropped $1.42, or 1.9 percent, to $71.75 after hitting a low of $71.63.

"There is growing concern that suppliers such as Saudi Arabia and Russian Federation will struggle to compensate for potential production declines from Iran and Venezuela, which has supported oil prices in today's trading session", said Abhishek Kumar, senior energy analyst at Interfax Energy in London.

Opec's outlook comes amid pressure on the cartel to pump more to offset any impact from Iranian sanctions and calls from US President Donald Trump to boost output. Analysts polled by S&P Global Platts expect the EIA to report a climb of 1.61 million barrels in crude supplies.

USA light crude was up 40 cents at $74.69. "In 2019, world oil demand growth is forecast at 1.36 mb/d, down by around 50 tb/d from last month's projections, mainly reflecting adjustments in the economic projections for Turkey, Brazil and Argentina", the report read.

Other reports by Iphone Fresh

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