Asia's imports of Iranian oil in Sep. stand at 1.13m bpd

Jeannie Matthews
November 3, 2018

Oil prices dropped again after two-week loss. They dropped 1.3% the day before, after hitting their lowest since Aug 17 at US$65.33 a barrel.

The contract bottomed at $63.11/Bbl earlier in the session, its lowest price since April 9.

Investors are concerned about the prospects for oil supply when new USA sanctions are implemented against Iran on Monday. US President Trump has made various comments suggesting that OPEC should up its output quotas and help lower the price of oil.

"The market is discounting this expectation right now", Thorpe said.

USA oil production that was surprisingly flat for the last few weeks nearly magically surged rising by 300,000 barrels a day, from 10.9 million barrels to 11.2 million barrels a day in one week, one of the biggest weekly jumps in recent memory.

China - the leading importer of Iranian oil - is still in discussions with the US on terms, but is among the eight countries, according to two people familiar with the discussions who also asked not to be identified.

US crude was up 26 percent this year through the high on October 3. For example, should the world lose Iran's 2.7 million barrels per day, OPEC may not be able to fill the gap.

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The summer driving season usually leads to higher consumption of gasoline in the United States for domestic travel, while the early fall is instead a period marked by refinery maintenance, all of which reduces oil consumption.

Futures on Brent crude for December delivery, on Wednesday morning, 31 October, up to 76,39 dollars per barrel.

The U.S. Energy Information Administration on Wednesday reported a sixth straight week of builds in U.S. crude inventories.

Prices of Brent crude oil futures were quoted 0.10% lower at $72.79 during the London noon Friday, and are now up by 8.85% for 2018.

Goldman Sachs estimates that Iranian crude exports will fall to 1.15 million barrels by the end of the year, down from 2.5 million barrels a day mid-year. Also stoking the bearish mood were expectations of a build in US crude oil inventories. EIA also forecast that total global liquid fuels inventories to decrease by 200,000 barrels per day in 2018, followed by an increase of 280,000 barrels per day in 2019.

For a sense of perspective, July 2016 was two months before a meeting that paved the way for an historic deal between OPEC, Russia and other producers to cut output. Saudi Arabia was pumping at then-record levels, and US drillers were adding rigs to American oil fields. Since the beginning of the week Brent fell by 6.1%, WTI - by 5.8%.

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