Sunday, 21 October, 2018

OPEC says oil market well supplied, wary of 2019 surplus

Indian refiners are concerned about the loss of Iranian crude once US sanctions start and are seeking exemptions Indian refiners are concerned about the loss of Iranian crude once US sanctions start and are seeking exemptions
Ginger Lawrence | 13 October, 2018, 22:53

Despite the fall in output, US crude futures settled down more than 2 percent at $73.17 per barrel on Wednesday, tracking the weaker USA stock market and reflecting the declining importance of Gulf of Mexico output due to burgeoning growth from onshore shale fields.

Brent crude futures fell $US2.83 overnight to settle at $US80.26 a barrel, a 3.41 per cent loss, after hitting a low of $US79.80, its weakest since September 24.

West Texas Intermediate for November delivery declined as much as $1.54 to $71.63 a barrel on the New York Mercantile Exchange, and was at $72.48 at 8:57 a.m. local time.

Iranian oil industry has been under pressure from the US efforts to isolate the country by reimposing sanctions.

Stockpiles of crude and refined products in industrialized countries rose by 14.2 million barrels in August, a second consecutive monthly increase.

The tanker shipments might change weekly, but the lower volumes in the starting phase of October indicate that Iranian crude oil exports are striking and falling rapidly than the market expected just a few months ago.

Iranian Oil Minister Bijan Zanganeh on Monday described a Saudi claim that the kingdom could replace Iran's crude exports as "nonsense".

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OPEC on Thursday lowered its estimate for the global oil demand next year due to the slower economic growth and United States shale output growth. Financial markets settled down Wednesday following the previous day's big moves when an easing of concerns over an imminent USA -led military strike on Syria sent stocks sharply higher and oil prices down.

This survey signified that the OPEC (Organization of the Petroleum Exporting Countries) producers increased crude outcome in last month that eased global supply concerns.

OPEC's September output increased 132,000 barrels per day (bpd) to around 32.8 million bpd.

Iran has questioned whether the market needs more oil and says its output is holding steady at about 3.8 million bpd.

"Even though [the storm] is going to miss most productive assets, it will be a narrow miss", Again Capital partner John Kilduff said.

The global benchmark posted a 1.3% gain on Tuesday. He further added that Saudi Arabia representatives have been claiming that they are able to balance Iran's losses under the US pressure. US light crude CLc1 was down 15 cents at $74.81. The International Monetary Fund cut its global economic growth forecasts for 2018 and 2019 on Tuesday, raising concerns that demand for oil may also slump.