Iranian Oil Armada Heads to China ahead of US Sanctions
22 October, 2018, 13:23 | Author: Sara Gill
By taking modestly less aggressive positions in the coming weeks, the US could distance itself from another example of aggressive Saudi policy and reduce USA dependence on the Saudis for stabilizing oil markets as Iranian exports are reduced.
Brent crude was down 31 cents at $79.74 a barrel at 1:24 p.m. EDT (1724 GMT).
us crude oil slumped $2.17, or 3 percent, to settle at $69.75 a barrel.
The EIA report indicated a massive decline of crude exports by 1.8 million barrels per day, which is characterized as bearish by the agency.
OPEC and its allies, known as OPEC+, have promised to supply the market with an additional one million barrels per day (bpd) since June, but that promise is still work in progress as not all members were able to deliver on their promises, or demand isn't yet there for that much crude. Meanwhile, President Donald Trump and his top diplomat cautioned against putting the entire U.S. -Saudi relationship at risk over dissident writer Jamal Khashoggi.
Two takeways from Wednesday's trading activity: first, the resiliency and determination of US producers continue to undercut persistent arguments from the analytical community that American output has hit its peak and won't be able to help compensate for the loss of Iranian crude due to the sanctions.
"Many European companies are leaving Iran, but [South] Korean firms have declared they will stay in Iran", he said, adding that Korean companies understand how important it is to be present in the Iranian market.
"We view that crude market risks are heavily skewed to the upside and whilst we are not explicitly forecasting Brent to rise to $100 per barrel, we see material risks of this coming to fruition", Japanese bank Mitsubishi UFJ Financial Group said in a note to clients.
"Stocks are building", said Olivier Jakob, oil analyst at Petromatrix. But equities turned sharply lower in late morning trade, and the oil market fell to session lows.
The U.S. administration has been pushing its allies to cut Iranian oil imports and is encouraging Saudi Arabia, other OPEC states and Russian Federation to pump more oil to meet the shortfall n the global market. However, Saudi circles deny this and assure us that they have the capacity to increase production in case of increased demand.
Money managers cut net long U.S. crude futures and options positions in NY and London by 37,080 contracts to 259,375 in the week to October 16, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday - the lowest level since September 19, 2017. John Bolton, Trump's national security adviser, previously said the goal is to get Iran's oil exports down to "zero" by November.
That could, like Trump's comments, seek to give the kingdom a way out of the global firestorm of criticism over Khashoggi's fate. On Tuesday, a Turkish Foreign Ministry official acknowledged police want to search the Saudi consul's home as well.
A Punjab police commando and and a photojournalist suffered minor injuries in the stone-pelting, a police officer said. Navjot Kaur, who was the chief guest at the event held on the Dhobi Ghat ground near Joda Phatak.
Saudi Arabia, meanwhile, said King Salman thanked Erdogan "for welcoming the kingdom's proposal" for forming the working group. The kingdom has called the allegations of foul play "baseless" but has offered no evidence the writer left the consulate.
Railway authorities clarified that the organisers had not taken any permission from them to burn the effigy near the tracks. Amarinder Singh, Punjab chief minister, said he was rushing to Amritsar to supervise relief and rescue operations.
The Prime Minister added: "We are not standing here proposing an extension to the implementation period". The chaos promised by "no deal" is very much in the minds of officials on both sides of the Channel.
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