Oil inches higher as Iran sanctions draw closer

Oil prices edged up on Monday, as markets were expected to tighten once US sanctions against Iran’s crude exports are implemented next month.

کد خبر: ۸۴۴۹۴۰

تاریخ: ۳۰ مهر ۱۳۹۷ - ۰۸:۴۴

Front-month Brent crude oil futures were trading at $79.88 a barrel at 2.48am GMT, 10c above their last close.

US West Texas Intermediate (WTI) crude futures were at $69.31 a barrel, 19c above their last settlement.

Also in the US, Intercontinental Exchange said its new Permian West Texas Intermediate crude futures contract, deliverable in Houston, Texas, will begin trading on Monday.

The main price driver in Asia on Monday was the looming start of US sanctions against Iran’s oil exports, which will start on November 4.

While the Organisation of the Petroleum Exporting Countries (Opec) agreed in June to boost supply to make up for expected Iran disruptions, an internal document reviewed by Reuters suggested Opec is struggling to add barrels to the market as an increase in Saudi Arabian supply was offset by declines in Iran, Venezuela and Angola.

Fatih Birol, executive director of the International Energy Agency (IEA), said on Monday that other producers might struggle to fully make up for the expected fall in Iranian supply, and that, coupled with strong demand, could lead oil prices to rise further.

Traders said major oil consumers were stockpiling in anticipation of more disruptions.

“In China, higher seasonal demand and suspected stockpiling are occurring, while similarly the US and the OECD [Organisation for Economic Co-operation and Development] continue building stockpiles ahead of potential supply disruptions this winter,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.

Despite this, Innes said overall global oil supply was enough to meet demand.

There were also some signs of rising output, especially in North America.

US drillers added four oil rigs in the week to October 19, bringing the total count to 873, energy services firm Baker Hughes said on Friday, raising the rig count to the highest level since March 2015.

The US rig count is an early indicator of future output. With activity rising again after months of stagnation, US crude production is also expected to continue to rise.

Looking further out, concern that the trade dispute between the US and China would crimp economic growth may weigh on the outlook for oil prices.

“The full impact of the US-China trade war will hit markets in 2019 and could act as a considerable drag on oil demand next year, raising the possibility of the market returning to surplus,” Emirates NBD bank said in a note.

Shipping brokerage Eastport said on Monday that “Chinese manufacturing is beginning to slow” and that “Trump’s proposal of slapping … tariffs on additional … Chinese goods from January 1 would be a further drag on trade”.