USA crude oil inventories decrease sharply last week: API

Andrew Cummings
September 16, 2018

"While Iranian exports have fallen by almost 500,000 barrels per day since May, shipments from Iraq and Saudi Arabia have risen by 200,000 barrels per day and 60,000 barrels per day respectively", the IEA added.

The IEA said tightening supply was putting increasing pressure on prices: “The price range for Brent of $70-$80 per barrel in place since April could be tested, ” it said.

Tanker data suggest Iranian crude exports are already off by about 500,000 bpd - some of it floating in tankers in the waters of the Gulf waiting to find ports to unload.

Crude oil also surpassed hydrocarbon gas liquids (HGLs) to become the largest US petroleum export product, with 1.8 million b/d of exports during the same period.

“In addition, there is a risk to growth from an escalation of trade disputes, ” the Paris-based agency said.

"Oil prices jumped overnight as American Petroleum Institute inventory data showed a large drawdown in inventories", said William O'Loughlin, investment analyst at Australia's Rivkin Securities.

Europe continues to be the second-largest recipient of USA crude oil exports, receiving 555,000 b/d.

Brent crude oil fell $1.56, or 2 per cent, to settle at $78.18 per barrel.

Outside the United States, markets focused on US sanctions against Iran, which from November will target its oil sector.

"We think oil market fundamentals are increasingly supportive of crude prices, at least at current levels", said Gordon Gray, HSBC's global head of oil and gas equity research.

U.S. West Texas Intermediate (WTI) futures were up 41 cents at 69.00 a barrel after dropping 2.5 percent on Thursday. This news was being supported by the unknown, or the compliance with the US sanctions on Iran.

With frequent attacks on Libya's production and falling output in Venezuela, traders are weighing up whether Opec and its allies, as well as the USA, will be able to ward off supply shortages. "The situation should be closely watched, the right decisions should be taken", he said.

In Venezuela too, production dipped in August to 1.24 million barrels a day, and should it continue to decline, may hit 1 million barrels a day at the end of 2018.

The Organization of the Petroleum Exporting Countries (OPEC) on Wednesday reduced its forecast for 2019 global oil demand growth, pointing to economic risks.

OPEC said it expects demand growth of 1.41 million bpd in 2019, a 20,000-bpd downgrade from its previous forecast. The country is the third-biggest producer among Opec members.

The storm is expected to make landfall on the U.S. East Coast on Friday, and has caused fuel shortages as millions of households and businesses have evacuated.

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