Published: Mon, August 06, 2018
Money | By Bruce West

RBC Oil Market Will Tighten Amid Significant Loss Of Iran Crude

RBC Oil Market Will Tighten Amid Significant Loss Of Iran Crude

Even with last week's rise, overall US crude inventories are below the 5-year average of around 420 million barrels.

The West Texas Intermediate (WTI) for September delivery lost 1.10 USA dollars to settle at 67.66 dollars a barrel on the New York Mercantile Exchange, while Brent crude for October delivery erased 1.82 dollars to close at 72.39 dollars a barrel on the London ICE Futures Exchange.

In the statement on Wednesday, a day ahead of monthly oil and gas output data publication, Novak said that Russian Federation was pumping on average 40,540 bpd less in July compared to October 2016, a cut-off month for the OPEC+ deal.

Stocks at the key Cushing storage hub in Oklahoma fell by 1.3 million barrels, the lowest level since October 2014, according to data from the Energy Information Administration (EIA). US crude CLc1 rose $1.30, or 1.9 percent, to $68.96 a barrel.

"South Korean refiners are turning to US crude because of Iran sanctions".

Brent crude futures LCOc1 were down 13 cents, or 0.2 percent at $73.32 a barrel by 0052 GMT, after rising 1.5 percent on Thursday.

Oil markets have been halting further declines recently after the energy commodity fell too far, too fast on pumped-up production from OPEC, and supply constraints both within the USA overseas have seen oil markets quick to buy, implying that bullish oil traders, while sidelined on rising production, are remaining close at hand.

"Oil is holding up reasonably well".

Saudi Arabia's crude oil production in July was around 10.290 million barrels per day, two OPEC sources said on Friday. Under constant pressure from US President Donald J. Trump to cool prices, Opec and its allies are fulfilling a pledge made in June to increase output to ease concerns over potential supply disruptions in countries such as Iran and Venezuela.

"At the moment, there is a mismatch in timing, where there is increasing OPEC supply and yet we're not seeing a significant reduction in Iranian supply", Patterson said.

The United States believes Iran is preparing to carry out a major exercise in the Gulf in the coming days, apparently moving up the timing of annual drills amid heightened tensions with Washington, U.S. officials told Reuters on Wednesday. "This primary US oil hub's inventory now sits at the lowest levels since 2014", he said.

The price jump earlier this summer had come about in large part because of President Donald Trump 's decision to pull the US out of an global agreement to curb Iran's nuclear program.

Oil prices are also feeling the effects of tensions over global trade, which could cause economic growth to slow.

"There are a lot of escalation points that could occur very quickly and that worries me", Jonathan Barratt, chief investment officer at Ayers Alliance in Sydney, said.

That compares with a forecast for a 3-million-barrel decline in a Bloomberg survey of analysts.

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