Oil prices rise after U.S. renews sanctions against Iran

Aug 10, 2018, 03:37
Oil prices rise after U.S. renews sanctions against Iran

The oil prices had a slightly downtrend movement in the week ending August 3, posting a fourth loss in the past five weeks.

Meanwhile, U.S. crude production, which has climbed dramatically fuelled largely by increased output from shale formations, may now rise more slowly as prices drop, according to the U.S. Energy Information Administration's monthly report. USA gasoline stocks climbed 2.9 million barrels last week to 233.87 million barrels, while distillate stocks were up 1.23 million barrels at 125.42 million barrels.

On top of that, Iranian President Hassan Rouhani has threatened to disrupt regional oil production and exports if the Trump administration follows through with oil sanctions.

"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.

Observers have dismissed Trump's call for Saudi Arabia to abruptly increase oil production as political "noise".

Front-month Brent crude oil futures LCOc1 were down 38 cents on the day at $74.27 a barrel by 1227 GMT, while USA crude futures CLc1 were down 67 cents at $68.50 a barrel.

West Texas Intermediate crude for September delivery traded at $69.11 a barrel on the New York Mercantile Exchange, down six cents, at 7:55 a.m.in London.

Will the US-China War now take now escalate even further as Beijing refuses to cease business with Tehran? Vladimir Putin stated on Tuesday that he is deeply disappointed by the U.S. sanctions on Iran.

It also is not clear if the State Department could allow sanction waivers, which were used in the Obama era to wean the world off of Iranian oil and avoid supply shocks. Long-term contracts - which involve the sale of cargoes of a certain quality, volume and price over a set period from as little as 6 months to multiple years - for American oil are uncommon and most deals are done on a spot basis after a decades-long export ban was lifted in late 2015.

The August total is also likely to be just above the 9.65 million barrels imported over the first seven months, showing the scale of acceleration in India's imports of U.S. crude.

Syncrude Canada's nameplate capacity stands for roughly 10 percent of the Canadian crude oil supply.

Crude oil prices plunge to their lowest levels in six weeks after total USA stockpiles of oil and fuel rose to a seven-month high and U.S.

Markets remained supported by the introduction on Tuesday of new United States 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. OPEC and Russian Federation reported an increase in their output by 300,000 and 150,000 barrels per day in July, respectively.

Flows from Iran to China and India - its two key customers - remained high, but exports to South Korea, Europe fell steadily as these buyers start to elsewhere.

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