Asia's imports of Iranian oil in Sep. stand at 1.13m bpd

Andrew Cummings
November 3, 2018

Benchmark Brent crude oil LCOc1 fell by $2.25 a barrel to a low of $75.09 before recovering slightly to around $75.50, down $1.84, by 1345 GMT. Since the beginning of the week Brent fell by 6.1%, WTI - by 5.8%.

By 11:12 a.m., WTI front-month traded only 1.5 percent lower at $66.05 per barrel, while Brent front-month traded 1.7 percent lower at $76.05.

"In spite of the increase of crude oil inventories, crude futures prices are being supported by the inventory decline in refined products", said Andrew Lipow, president of Lipow Oil Associates in Houston.

A list of all countries getting US waivers allowing them to import Iranian oil is expected to be released officially on Monday, industry sources say.

All this is happening a few days before Iran is expected to cease oil exports.

At the same time, oil has also been caught in the global market slump, fueled by a trade fight between the world's two largest economic super powers. Namely, US production levels.

Russian Federation is pumping oil at a post-Soviet high, U.S. crude output has topped 11-million barrels per day (bpd) and a Reuters survey of oil cartel Opec production shows the group more than made up for any declines in Iranian shipments in October.

"A Saudi pledge to produce as much oil as possible, and the stock market rout, have sharply reduced concerns about the November 4 implementation of U.S. sanctions against Iran", said Ole Hansen, head of commodity strategy at Saxo Bank.

Increases in global supply, as well as trade war tensions between the United States and China, sent oil plunging earlier in the week.

However, the effects of the USA withdrawal from the Joint Comprehensive Plan of Action (JCPOA) in May, the resumption of Iran sanctions and the potential response from other countries pose significant uncertainty to the forecast. Natural gas volumes decreased four percent "largely due to a continuing near-term shift in US unconventional development from dry gas to liquids", ExxonMobil said.

The 15-member producer cartel of the Organisation of the Petroleum Exporting Countries (OPEC) boosted oil production in October to the highest since 2016 at 33.31 million barrels per day (bpd), a Reuters survey found this week.

Few of the central banks out there can influence oil prices but that doesn't mean some won't still raise rates in response to oil-induced inflation, particularly if they see other factors adding to domestic price pressures.

Thus, the cost of the futures on Brent crude rose by 0.63%.

Oil was also being weighed down by signs of rising supply from top producers.

Other reports by iNewsToday