Published: Fri, November 02, 2018
Money | By Bruce West

US, Brent crudes fall, as concern deepens over global economy

US, Brent crudes fall, as concern deepens over global economy

Oil prices dropped more than 1 percent on Tuesday on signs of rising supply and concern that global economic growth and demand for fuel will fall victim to the U.S.

Iran's First Vice President Es'haq Jahangiri was quoted by media as saying that the government of President Hassan Rouhani had already devised mechanisms to counter the impacts of returning U.S. sanctions against the country's oil exports.

"We are determined to implement our policy of maximum pressure on Iran".

On May 8, President Donald Trump announced he was pulling the USA out of the 2015 Iran nuclear deal and promised to hit Tehran with sanctions on the country's energy oil and financial sectors despite objections from other parties to the agreement.

Trump said he would like to make a deal now but that China was not ready.

Oil prices edged lower on Monday, with futures on track for the worst monthly performance since mid-2016, after Russian Federation signaled that output will remain high and as concern over the global economy fueled worries about demand for crude.

"China trade war and economic crisis in emerging markets, is bleeding into the oil market", Will Yun, a commodities analyst at Hyundai Futures Corp., said by phone.

That's an increase of 10 million bpd since the start of the decade and means that these three producers alone now meet a third of global crude demand.

The United States has 875 operating oil drilling rigs in this week, adding two more from the previous week, according to data issued by oil service company Baker Hughes on Friday.

Other Iranian oil officials, in addition to the National Iranian Oil Co. and National Iranian Tanker Co., have recently declined to specify the Islamic Republic's daily export data.

With a week to go until USA sanctions on Iran's oil snap back, it's not only Iranian crude exports that the United States looks to cut.

In case a planned meeting between presidents Donald Trump and Xi Jinping yields no progress on the sidelines of a Group 20 summit in Buenos Aires next month, USA officials are preparing a new list which would apply to the Chinese products that aren't already covered by previous rounds of tariffs.

High oil prices are hurting consumers and could dent demand, the executive director of the International Energy Agency (IEA) said on Tuesday.

"The fact that this price weakness is developing just ahead of the official kickoff of the Iranian oil sanctions suggests an amply supplied market in which additional supply was brought to market well in advance of a likely acceleration in Iranian export decline", Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.

Oil prices fell on Monday, as concern over the global economy put crude on track for its biggest monthly fall since mid-2016.

Jahangiri further emphasized that the U.S. efforts to encourage Saudi Arabia to replace Iran's oil in markets were in vain, stressing that oil prices would nonetheless rise if Iranian supplies were to be cut off.

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