Oil prices ease as trade row clouds demand outlook

Daniel Fowler
September 21, 2018

With Iran's crude sales falling due to the US sanctions and countries such as Venezuela struggling to avoid outright economic collapse, it was perhaps inevitable that Mohammad Barkindo, secretary general for the Organization of the Petroleum Exporting Countries (OPEC), would tell Reuters that his cartel will keep working with other oil producers to manage global supplies in the face of demand for crude facing "headwinds".

Brent futures LCOc1 also rose but the gains were more muted, as the global benchmark ended 37 cents, or 0.5 percent, higher at $79.40 a barrel.

West Texas Intermediate futures for October delivery rose 40 cents to settle at $68.99 a barrel on the New York Mercantile Exchange.

According to data by the JODI database, which collects self-reported oil figures from 114 countries, Saudi Arabia's crude oil exports in July dropped by 126,000 bpd month on month, to 7.12 million bpd.

Iran is a "very important producer and exporter" of oil, the group's Secretary-General Mohammad Barkindo said at an event in the United Arab Emirates city of Fujairah.

OPEC must stick together for the good of the global economy as founding member Iran faces renewed US sanctions, the head of the cartel said Tuesday - though he did not address how an already-tight market will make up for the loss of Iranian supply.

Brent may fall more than $1 to $76.37 a barrel while WTI crude prices may revisit the September 14 low of $67.94, he wrote.

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Meanwhile, ministers from Opec nations and non-Opec producers are set to meet on Sunday to discuss compliance with output policies.

Official U.S. government data is due to be released on Wednesday.

November WTI and December Brent Crude Oil should continue to push higher throughout the session as long as a possible supply shortage remains the theme.

U.S. crude futures CLc1 were up $1.08 at $70.93 a barrel by 11:15 a.m. [1515 GMT], after the U.S. Energy Information Administration said crude and gasoline stockpiles fell last week.

Saudi Arabia has mentioned several times recently that they have no desire to push oil prices over $80/barrel, a move higher may be unavoidable as United States sanctions on Iran are set to come into effect beginning November 4th.

US President Donald Trump has called for the Organization of the Petroleum Exporting Countries members, primarily US ally Saudi Arabia, to raise their production, and warned importers to stop buying oil from Iran or face American sanctions.

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