Published: Fri, August 10, 2018
Money | By Bruce West

WTI Crude Oil and Natural Gas Forecast August 10, 2018

WTI Crude Oil and Natural Gas Forecast August 10, 2018

In the previous US crude sanctions against Iran, about half of its oil exports of 2.4 million barrels were removed from the market.

Indian Oil has bought 6 million barrels of USA crude for delivery in November to January, a company official said, as the nation's top refiner scouts for alternatives to Iranian oil ahead of impending United States sanctions.

China's announcement came just a day after the U.S. Trade Representative's office released a finalized list of $16 billion worth in Chinese goods that will be hit with tariffs, effective August 23.

"It's certainly going to impact on movement between the USA and China, making it less efficient, meaning pressure on prices here", said Andrew Lipow, president of Lipow Oil Associates.

"Of course, such decisions being taken by the US side are absolutely unfriendly and can hardly be associated with the. constructive atmosphere achieved at the latest meeting of the two presidents", he was quoted by Russian news agency Tass as saying.

"Past instances of El Niño have resulted in sharp drops in USA residential and commercial heating oil demand and prices", it said.

Spot Brent crude oil futures were at $73.42 per barrel at 0653 GMT on Monday, up 21 cents, or 0.3 percent, from their last close. West Texas Intermediate, the US benchmark for the price of oil, was up 0.06 percent to $66.89 per barrel.

Chinese oil buyers had already slowed their purchases of USA oil to avoid a likely import tariff threatened by Beijing amid the escalating trade dispute between the world's two largest economies.

"I think the market will need to see the evidence gathering on the loss of Iranian barrels following the re-imposition of US sanctions before it moves up, and I expect it should become very apparent by the end of this month", Tchilinguirian said.

Markets remained supported by the introduction on Tuesday of new U.S. sanctions against Iran, which initially target Iran's purchases of dollars - in which oil is traded - as well as metals trading, coal, industrial software and its automotive sector.

On top of the impact on the broader global economy, there is growing worry in the crude oil market about Chinese demand.

It is not clear whether China, the biggest buyer of Iranian crude, will bow to US pressure. A weekly report by the Energy Information Administration, scheduled to be released at 10:30 a.m. ET, is expected to show a drawdown in USA inventories. It fell 3.2 per cent to $72.28 a barrel in the previous session. All countries must stop importing Iranian oil by then, the State Department said in June, or face sanctions.

Distillate stockpiles, which include diesel and heating oil, rose by 1.2 million barrels, versus expectations for a 220,000 barrels increase, the EIA data showed.

However, July imports were still the third-lowest so far this year.

In another sign that exporters are preparing for slower demand from some of the big Asian buyers, Iraq cut its official selling price for September cargoes of Basra Light crude for its Asian customers on Thursday.

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