Oil firm as Iran sanctions loom, but US seeks to prevent supply shortfall
13 September, 2018, 17:25
USA crude futures rose 61 cents to $69.86 a barrel.
Oil has risen above $80 a barrel to its highest level this year amid concerns about supplies from Iran and a fall in United States stockpiles.
Since spring, when the Trump Administration said it would impose sanctions on Iran, traders have been focusing on the impact they could have on global supply.
On the other hand, in its latest report, the U.S. Energy Information Administration announced that it forecasted the U.S. crude oil production to rise by 840 barrels per day to 11.5 million bpd in 2019 compared to the previous estimate of a daily increase of 1.02 million barrels.
Prices extended gains in post-settlement trade after industry data from the American Petroleum Institute showed US crude inventories slumped 8.6 million barrels last week, versus analysts' forecasts of a 805,000-barrel decrease.
"Things are tightening up", the agency said in its monthly report, but added: "As we move into 2019, a possible risk to our forecast lies in some key emerging economies, partly due to currency depreciations versus the USA dollar raising the cost of imported energy".
US light crude pushed over $70 due to falling USA crude inventories and production levels.
As investors grow concerned that Iranian sanctions may leave the market short of crude oil, November Brent crude futures now trade at a premium of $0.47 over the December contract, highest since May.
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But the USA government does not want to push up oil prices, which could depress economic activity or even trigger a slowdown in global growth.
Perry will also meet with Russian Energy Minister Alexander Novak on Thursday in Moscow.
"This is a huge uncertainty on the market how countries, which buy nearly 2 million barrels per day (bpd) of Iranian oil, will act". Novak did not provide details.
U.S. crude stocks fell by 8.6 million barrels in the week to September 7 to 395.9 million, the American Petroleum Institute (API) said on Tuesday, while the U.S. Energy Information Administration (EIA) cut its forecast for U.S. crude output growth in 2019.
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EIA revises down USA crude oil output expectations.
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