Factors beyond producers' control are impacting oil market - OPEC

Ivan Schwartz
October 14, 2018

Pump jacks operate at sunset in an oilfield in Midland, Texas U.S. August 22, 2018. Refinery utilization rates fell by 1.6 percentage points.

The Islamic Republic exported 1.1 million barrels per day (bpd) of crude in that seven-day period, Refinitiv Eikon data showed.

India, Iran's top oil client after China, was one of the few nations that continued to trade with the Middle Eastern country when sanctions were previously in force.

Benchmark Brent crude ended Tuesday's session up $1.09, or 1.3%, at $85 a barrel, having fallen as low as $82.66/Bbl Monday.

USA production growth in 2018 is now expected to rise by 2.05 million barrels a day, up by 31,000 barrels from last month's forecast.

But supply concerns are keeping the market on edge.

Technology shares tumbled on fears of slowing demand and concerns about U.S.

Oil prices slumped to more than two-week lows on Thursday as global stock markets fell, with investor sentiment made more bearish by a bigger-than-expected USA crude inventories build. [EIA/S] USA crude was down 3.6 percent on the week, while Brent crude fell 4.1 percent.

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The IEA report is the latest official forecaster to predict weaker demand ahead and conclude that supply is adequate.

While re-imposing the sanction against Iran in May 2018, the United States has asked all countries, including India, to stop all oil imports from Iran by November 4, 2018, or face sanctions, making it clear that there would be no waivers to anyone.

"The bearish alarm bells are ringing for next year's oil balance as market players brace for the return of a supply surplus", said Stephen Brennock of oil broker PVM. The cartel's estimate of total USA production in 2019 increased from 17.52 million barrels a day to 17.67 million barrels.

Oil found support on Friday from a gain in world stocks. Crude futures at times track with equity markets. The speculator group cut its combined futures and options position in NY and London by 36,652 contracts to 296,456 during the period.

Oil prices dropped 2 per cent on Wednesday as US equity markets broadly fell, even though energy traders anxious about shrinking supply from Iran due to US sanctions and also kept an eye on Hurricane Michael, which closed almost 40 percent of US Gulf of Mexico oil output.

These are reportedly the largest reductions in a year, and occurred as companies evacuated staff and shut in platforms in order to ensure safety.

The evacuations affected about 11 percent of the occupied platforms in the Gulf, it said.

Other reports by GizPress

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