Factors beyond producers' control are impacting oil market - OPEC

Daniel Fowler
October 14, 2018

The weaker outlook comes as pressure is increasing on the Organization of Petroleum Exporting Countries and its allies to pump more to offset the impact of looming US sanctions on Iran and Venezuela's collapsing oil industry.

Iran's crude oil exports dropped down to 1.1 Million bpd (barrels per day) during the start of October, falling down from 1.6 Million bpd in September since the USA sanctions on Iran's oil is just a few weeks away.

U.S. West Texas Intermediate (WTI) crude futures were down by $1, or 1.4 percent, at $72.17, having also fallen to their lowest since September 28. OPEC has been under the hit list from the US for declining the increased outcome to answer rising oil prices.

"On the other hand, Iran sanctions are only weeks away". The IEA said the market looked "adequately supplied for now" and trimmed its forecasts for world oil demand growth this year and next.

"At the heart of the price malaise are concerns that oil demand will be adversely impacted by a myriad of downside risks facing the global economy". He further added that Saudi Arabia representatives have been claiming that they are able to balance Iran's losses under the USA pressure.

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

Data from other sources, such as from the Institute of International Finance, show that Iranian oil exports are declining before the United States imposes sanctions on Iran's oil sector on November 4 after pulling out of an international agreement on Iran's nuclear activities.

Gaza border: Six palestians killed during protest
Tamer Abu Ermanah, 27, was shot and killed by Israeli soldiers east of the town of Rafah, in the southern Gaza Strip, he said. The deaths occurred during Friday protests, which often turn violent, along the fence separating Israel and the Gaza Strip.

Oil edged further above $80 a barrel on Friday as a rally in equities lent support, though prices pared most of their gain after a closely watched forecaster deemed supply adequate and the outlook for demand weakening.

OPEC said Thursday that the oil market was "well supplied", and downgraded its global demand forecast. The tankers are sailing to India, China and the Middle East.

United States sanction go into place on November 4th.

The hefty discounts on Canadian crudes reflect transportation bottlenecks out of Western Canada, along with softer demand as a number of US refiners are offline for maintenance, said Michael Tran, Commodity Strategist with RBC Capital Markets.

Crude had surged to a four-year high earlier this month with impending American sanctions against Iran set to curtail exports from the OPEC's third-largest producer.

A drop in US oil production this week supported prices.

Other reports by

Discuss This Article