Oil gains after surprise drop in Saudi crude output

Oil gains after surprise drop in Saudi crude output

Oil pumps are seen at sunset outside Vaudoy-en-Brie, near Paris, France April 23, 2018.

Looming US sanctions against Iran will likely hit Tehran's oil sales overseas, and it could lead to a price spike in oil contracts.

West Texas Intermediate (WTI) crude futures CLc1 were up 59 cents at $69.60 a barrel and Brent crude oil futures LCOc1 were up 86 cents to $74.61 per barrel at 6.52 a.m. ET.

Sanctions on Iran and additional support from signs of declining oil inventories in the United States pushed the price of oil higher early Tuesday.

French bank Societe Generale said there was now a "comfortable supply" in physical crude markets, but noted, "Iran sanctions will take another one million bpd off the markets".

Mr Trump's sanctions follow the withdrawal of the USA from the Iran nuclear deal earlier this year.

US sanctions on Iran's energy sector are set to be re-imposed after a 180-day "wind-down period" ending on November 4.

Brent, the global benchmark, rose 1.3% $74.65 a barrel. Many analysts have said that this time, the negative impact on Iranian oil trade will be less significant, and Iran will lose only half of the previous loss.

Crude futures briefly rose in post settlement trade, with WTI at $69.07 a barrel, on data from the American Petroleum Institute that showed USA crude inventories fell 6 million barrels last week.

More news: China Tariffs on $16B Finalized for August 23 by Trump Administration
More news: Frankfurt airport evacuated after unauthorised person gets in security
More news: OH 12th Congressional District Special Election Results Show Close Race

WTI had pierced 69 the figure again with a high so far of $69.15bbls. President Donald Trump announced in May the United States would withdraw from the deal, which offered sanctions relief in exchange for restraints on Tehran's nuclear weapons program.

In other news, US drillers cut two oil rigs in the week to August 3, bringing the total count down to 859, General Electric's Baker Hughes energy services firm said on Friday.

Iraqi Prime Minister Haider al-Abadi said his country opposes sanctions on Iran, but will abide by them to protect its own interests.

Meanwhile, other major producers are ramping up their output.

This is not about bombarding the market with oil and pushing the price into the $50s, it is about preparing the market and easing the transition, he said.

But new data released on Monday showed Saudi Arabia's oil production fell in July by 200,000 bpd from the month earlier.

Additionally, there are also reports that many USA shale oil drillers posted disappointing quarterly results in recent weeks, hit by rising operating costs, hedging losses and a drop in crude prices away from 2018 highs reached between May and July.

"Oil sanctions are next (in November), and in our view, it would be a big mistake to expect waivers in the weeks ahead based on Trump's track record on Iran", he said.

"Without the extra Saudi oil we had in June, it's hard to crunch the numbers and get a lower price going into the end of the year", said John Kilduff of Again Capital.

Related Articles

  • Michelle Obama and Joe Biden Wrote Incredibly Sweet Birthday Messages to Barack

    Michelle Obama and Joe Biden Wrote Incredibly Sweet Birthday Messages to Barack

    August 4 marks former President Barack Obama's 57th birthday and Illinois' first annual Barack Obama Day. Moving forward, August 4, the former president's birthday, will be celebrated as " Barack Obama Day".
    Manchester City goalkeeper Hart signs for Burnley

    Manchester City goalkeeper Hart signs for Burnley

    England goalkeeper JoeHart made 348 appearances for City and won two Premier League titles with the club. Burnley's other England keeper Heaton is still not fully fit as he recovers from a calf injury.
    Malaysian ex-PM Najib to be charged with money laundering

    Malaysian ex-PM Najib to be charged with money laundering

    The Malaysian authorities have revoked his passport and issued an arrest warrant although he has previously denied any wrongdoing. He said Indonesia, Malaysia and the USA recently activated the mutual legal assistance treaties among themselves.
  • China poised to levy $60 billion in tariffs

    China poised to levy $60 billion in tariffs

    If China follows through on the threat, almost 90% of all United States goods heading to China will be subject to tariffs. After the earlier action against $34 billion of USA goods, that left about $120 billion available for retaliation.
    This researcher wasn’t safe from great white shark

    This researcher wasn’t safe from great white shark

    "Whoa, holy crap! It jumped right out of the water!" Skomal and his crew just happened to catch one on camera . A biologist attempting to observe a great white shark ended up getting a little too close for comfort.
    Ruby Rose Will Play Batwoman In Arrowverse Crossover Event

    Ruby Rose Will Play Batwoman In Arrowverse Crossover Event

    In a city desperate for a saviour, Kate must overcome her own demons before embracing the call to be Gotham's symbol of hope. Australian film star Ruby Rose will be suiting up as the DC hero Batwoman for the USA network The CW, Variety has learned.
  • Mauling time high in the air

    Mauling time high in the air

    The Lions capitalised immediately, as Lions hooker Malcolm Marx squeezed past Test locks Sam Whitelock and Scott Barrett to score. Once again the Crusaders had a response, though, and Barrett's try 10 minutes from time finally secured the result and the title.
    Chris Pratt-Starring Cowboy Ninja Viking On Indefinite Hold

    Chris Pratt-Starring Cowboy Ninja Viking On Indefinite Hold

    Cowboy Ninja Viking may still get underway before the end of the year, but it's unlikely that we'll the movie anytime next year. Craig Mazin wrote an earlier draft of the screenplay with an original draft by Paul Wernick and Everett David Reese .
    Dota 2 : 'Artificial intelligence' makes a record by defeating human players

    Dota 2 : 'Artificial intelligence' makes a record by defeating human players

    OpenAI is scheduled to face an active professional squad at The International 8, which kicks off on August 15. The humans recovered a little in game two, conquering one tower, but still getting demolished.
  • Samsung Galaxy Note 9: Launch date, full specifications, and features

    Samsung Galaxy Note 9: Launch date, full specifications, and features

    Additionally, a leak has also suggested the features of the S Pen stylus that will reportedly also be sold standalone by Samsung . As per a WinFuture report, the S Pen will get Bluetooth support, a feature that has been suggested in leaks multiple times.
    Israel suspected in killing of top Syrian regime scientist

    Israel suspected in killing of top Syrian regime scientist

    The New York Times on Monday quoted "a senior official from a Middle Eastern intelligence agency" as saying that Israel was behind the assassination.
    Prison for couple after boy repeatedly raped and sold for sex online

    Prison for couple after boy repeatedly raped and sold for sex online

    The 48-year-old woman and her 39-year-old partner were also convicted of repeatedly raping the boy, now 10, and filming the abuse. The couple has also been ordered to pay a total €42,500 (£38,000) in compensation to the boy and another victim, a young girl.