Oil up after OPEC sources say Saudi crude output fell

08 August, 2018, 20:58 | Author: Brooke Harris
  • A man pumps gas into his car at a gas station in Caracas

Oil prices started the week with gains due to the focus on supply disruptions and a potential impact of US sanctions on Iranian crude oil output.

The balance, however, could be disrupted by potential sanctions by China against US oil imports and unplanned supply disruptions.

Indian Oil Corp, the country's top refiner, will buy 6 million barrels of U.S. crude oil for November to January delivery through a mini-term tender, its head of finance said on Wednesday.

Reuters reported that China's Unipec, the trading arm of state oil major Sinopec, has suspended crude oil imports from the United States due to a growing trade spat between Washington and Beijing, three sources familiar with the situation said. The sanctions, which would come into force from November 4, are likely to block current payment routes used to pay for Iranian imports.

Some of the sanctions resume on Tuesday. The sanctions did not include Iran's oil exports.

China is slapping additional tariffs of 25 percent on $16 billion worth of USA imports, from fuel and steel products to autos and medical equipment, as the world's largest economies escalated their trade dispute. The WTI lost 0.47 US dollar to settle at 68.49 dollars a barrel on the New York Mercantile Exchange, while Brent erased 0.24 dollar to close at 73.21 dollars a barrel on the London ICE Futures Exchange. The US will also target business conducted by foreign financial institutions with the Central Bank of Iran.

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"With global demand remaining healthy and the global heatwave increasing oil demand, I think prices will remain well-supported in the near term", Hussein Sayed, chief market strategist at FXTM, said.

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

This would be nearly triple the 119,000 bpd India imported from the United States in July, and well above the 190,000 bpd for November past year, the previous record for a month.

Output was expected to rise 1.31 million bpd to 10.68 million bpd in 2018, lower than last month's forecast of growth of 1.44 million bpd to 10.79 million, the EIA said.

Although not imposed as yet, China has proposed import taxes of up to 25 percent on US crude, as well as on liquefied natural gas and coal. It shipped out nearly 3 million barrels per day (bpd) of crude in September, equivalent to around 3 percent of global demand. US Eastern time (0401 GMT) on Tuesday. Some analysts warned that a global heat wave could also now affect oil demand. In addition to crude oil and liquified natural gas, other listed products include diesel, coal, chemicals, cars, steel products and medical equipment.

This is unedited, unformatted feed from the Press Trust of India wire.

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