USA crude drops 2.7%, as traders cash in on rally

Daniel Fowler
October 7, 2018

"Trump thought he could shrink our country's oil revenues by imposing sanctions on Iran's oil and cutting its exports, but the rise in oil prices did not let that happen", Mohammad Baqer Nobakht, the head of Iran's Planning and Budget Organization, said Thursday.

"One of the things I think that's important, whether it's for Iraq or India or anyone else - particularly that's been a purchaser of Iranian oil - we've gone to really extra lengths to try and find substitute sellers of oil so that there would be alternative supplies at market rates", Bolton said. Due to those uncertainties, the market is now very nervous and emotional, and traders and other market participants could continue to make decisions based on those uncertainties and push prices higher, he said.

"Over the last two weeks, there's been a lot more evidence that even some of the larger customers - India and China - are not going to be buying Iranian crude from November", said John Saucer, vice president of research and analysis at Mobius Risk Group.

Oil prices declined from four-year highs Thursday, but markets remained focused on worries that US sanctions against Iran oil exports could create global supply deficits. Tokyo has been seeking a United States exemption for its Iranian oil imports as it sees the supplies as important for the country's energy security and businesses.

Osaka into China Open semifinals with win over Zhang
Yet Kerber struggled to keep her unforced errors count down, making 36 in the match, and her challenge ended in a final set rout. It is Osaka's second tournament since she upset Serena Williams in straight sets in the Flushing Meadows final on September 8.

US West Texas Intermediate (WTI) crude futures were up just 1c at $75.24 a barrel. This means that Korea's imports of US crude oil exceeded those of Iranian oil on a monthly basis for the first time. The contract is on course for a gain of around 2.5 percent for the week. Total volume traded was about 41 percent below the 100-day average.

Brent for December delivery was fetching around $85.30 per barrel in late London business versus $81.50 per barrel at the same time the previous week. The global benchmark crude traded at a $9.75 premium to WTI for the same month. The startup could lead to an additional 500,000 barrels a day in production.

The API data also pointed to an increase at the USA storage hub of Cushing, Oklahoma, of more than 2 million barrels. Currently, most OPEC producers are pumping at, or close to, full capacity, with only Saudi Arabia able to increase output significantly.

US commercial crude inventories rose by 907,000 barrels in the week to September 28 to 400.9 million, the private American Petroleum Institute (API) said on Tuesday.

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