Crude oil up slightly as commodity remains directionless

10 August, 2018, 03:43 | Author: Barbara Daniel
  • Oil rallies as Iran sanctions kick in

The U.S. sanctions targeting the Iranian oil industry will be effective on November 5, but Stratas believes "South Korea remains a potentially significant opportunity for American crude exports". The Turkish lira fell to a new record low against the dollar amid a dispute with the US government, while the Russian ruble also dropped after USA sanctions on the country over its alleged involvement in poisonings in Britain.

China's crude imports recovered slightly in July after falling for the previous two months, but were still among the lowest this year due to a drop-off in demand from the country's smaller independent, or "teapot", refineries. US West Texas Intermediate (WTI) crude futures were at $69.35 a barrel, up 18c. A boycott of USA oil indicates Beijing's continued purchase of Iranian oil, keeping Tehran in play in the global oil market.

India first imported United States crude oil in October past year and has since then oil firms have been buying oil from that country on a tender basis.

The renewed sanctions will not directly target Iranian oil until November, although U.S. President Donald Trump has said he wants as many countries as possible to cut their imports of Iranian crude to zero.

Iran is the third-largest producer among the members of the Organization of the Petroleum Exporting Countries (Opec).

The mounting trade tension has raised concerns that global economic growth will slow, lowering demand for crude oil in the process. Saudi Arabia reportedly pumped 10.3 million barrels per day (bpd) of crude in July, down about 200,000 bpd from a month earlier.

Amid widespread concern that the revived US sanctions against Iran, which shipped out nearly three million barrels per day of crude in July, would tighten global supply, Brent crude oil futures rose 86 cents to $74.61 per barrel at 1052GMT and US West Texas Intermediate (WTI) crude futures were up 59 cents at $69.60 a barrel.

Brent for October settlement traded at $72.44 a barrel on the London-based ICE Futures Europe exchange.

Crude inventories fell by 1.4 million barrels in the last week, compared with analysts' expectations for a decrease of 3.3 million barrels. "Crude oil and refined products affected by additional duties will reduce their competitiveness in the Chinese market".

Crude oil prices plunge to their lowest levels in six weeks after total US stockpiles of oil and fuel rose to a seven-month high and U.S. "Refiner demand for crude oil remains high, however, as does consumer demand for gasoline".

Including these cargoes, the company's USA crude purchase amount to 16 million barrels in total since April.

The market appeared to move past the renewal of US sanctions against Iran, the world's fifth largest oil producer, which underpinned crude futures in the previous session.

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