Oil down as U.S.-China trade fears outweigh inventory drop

Oil down as U.S.-China trade fears outweigh inventory drop

"We could see the Iran situation be the biggest bullish catalyst for oil prices", he said. It bought some 24 million tonnes of crude oil from Iran in the fiscal ended March 31 (2018-19). The hike in prices came as refiners across Asia seek more Saudi crude for June and July loading after the expiration on May 2 of USA -issued waivers permitting imports of Iranian oil. The waivers were lifted on May 2 which caught the oil market off guard.

Despite Washington's determination to completely stop the flow of oil from Iran to foreign markets, few believe that the zero-export target is achievable, even though the sanctions have done some considerable damage to Iran's coffers. The U.S. Energy Information Administration expects global appetite for oil to rise by 1.4 million barrels per day this year. It increased by 36 percent from February. China said it would be forced to retaliate after levies on some US$200 billion of its imports were increased to 25 per cent from 10 per cent. Negotiators from the two countries will meet again on Friday in Washington.

Rising tension between Washington and Iran, and the likelihood of output from Venezuela continuing to drop amid USA sanctions point to tighter markets.

Geopolitical rival Iran, whose production has fallen to below USA sanctions between January 2012 and January 2016, and denounced in advance any move by other members to claim its market share.

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Of the five supertankers that loaded Iranian crude in April for China, two have discharged, while another two are waiting off Ningbo and Zhoushan in eastern China to discharge, according to Refinitiv data and Refinitiv analyst Emma Li.

Saudi Arabia is set to host a meeting of the nine-country OPEC/non-OPEC market monitoring committee that it co-chairs with Russian Federation on May 19, in Jeddah, where comments from oil ministers are sure to be monitored closely. The United States failed to announce its punishment for those who will continue to purchase Iranian oil.

After a volatile week, investors were anxious over the possibility of a protracted and bitter U.S. The latest forecast puts the United States on track to reach the 13-million-bpd milestone in the fourth quarter of 2019.

The country, Africa's top oil producer, has been producing well in excess of its quota since February.

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