Oil nears $70 a barrel as concern grows over global supply

Oil nears $70 a barrel as concern grows over global supply

Oil prices were up on the week, buoyed in earlier sessions by a larger-than-expected draw in US crude inventories, weakness in the USA dollar and a reported fall in USA production, Commerzbank said in a note.

US crude stocks fell 5.3 million barrels in the week to September 7 to 396.2 million barrels, the lowest since February 2015 and about 3 percent below the five-year average for this time of year, the US Energy Information Administration (EIA) said on Wednesday.

"The price range for Brent of US$70-US$80 per barrel in place since April could be tested".

US crude inventories fell by 5.3 million barrels in the last week, the US Energy Information Administration said on Wednesday.

USA sanctions on Iran's energy industry, which come into force in November, have already cut supply back to two-year lows, while falling Venezuelan output and unplanned outages elsewhere will also keep the balance between supply and demand tight, the IEA said. Brent crude futures were last down 23 cents on the day at $78.83 a barrel by 3pm, having touched a session peak of $79.66, the highest since late May, when the price broke above $80.

"The situation in Venezuela could deteriorate even faster, strife could return to Libya and the 53 days to November 4 will reveal more decisions taken by countries and companies with respect to Iranian oil purchases", the IEA said, referring to the day US sanctions on Iran take effect.

"Markets ... are expecting substantial price pressure as Iran sanction loom", said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA in Singapore.

Russian energy minister Alexander Novak on Wednesday warned of the impact of US sanctions against Iran.

Russian energy minister Alexander Novak on Wednesday warned of the impact of U.S. sanctions against Iran.

Russia, the United States and Saudi Arabia are the world's three biggest oil producers by far, meeting around a third of the world's nearly 100 million barrels per day of daily crude consumption.

One factor that could weigh on long-term fuel demand is China's decision to take at least 1 million heavy duty diesel trucks off the roads by 2020, and to replace them with vehicles using alternative fuels like electric engines, liquefied natural gas or to shift transport to rail.

"Market participants are now evaluating this development in conjunction with potential for further declines in oil output from Iran and Venezuela, which portrays a significantly bullish picture on prices", said Abhishek Kumar, senior energy analyst at Interfax Energy in London.

"Crude oil production in OPEC rose month-on-month by 278,000 barrels a day in August, to 32.57 million bpd in August", the oil cartel said.

Oil traders were also watching the progress of category 4 Hurricane Florence, which is expected to make landfall in the U.S. by Friday.

"Saudi Arabia, OPEC's largest producer, saw its output rise modestly to 10.40 million bpd, up 38,000 bpd from the previous month, according to secondary sources, S&P Platts reported".

Related News:



Most liked

'I'm not racist' - Aussie cartoonist on Serena Williams
The anger came thick and fast, and it quickly became less about Knight's cartoon and more about perceived racism in Australia. Knight, who deleted his own account after being inundated with complaints from around the world, has not commented on it.

Final Fantasy Is Being Well Represented On Switch
When SquareEnix's Hajime Tabata joked that Final Fantasy XV might come to Nintendo's hybrid portable, fans bought into the hype. And so is World of Final Fantasy , as a new version called World of Final Fantasy Maxima (also coming to PC, PS4 and Xbox One).

FCC pauses review of T-Mobile, Sprint merger
It also needs to review a new business model referred to as "Build 9". The FCC says that it didn't get Build 9 until September 5th.

Joyce Drifting Southwestward With No Change in Strength
Currently, tropical-storm-force winds have been recorded extending outward up to 160 miles (260 km) from the centre of the storm. However, Isaac is still predicted to trigger tropical-storm-force winds and life-threatening flash flooding.

Jurgen Klopp On Top of Liverpool Midfield Battle - Former Reds Boss
Liverpool take on Tottenham Hotspur at Wembley at 12:30pm on Saturday and Jurgen Klopp was expected to reassess his key stars' fitness ahead of the fixture.

Pokémon's Game Freak Announces New 'Town' RPG
The game takes place entirely in the village and it'll be up to you to help the villagers take on various monsters. The game is tentatively titled " Town ", and it is slated for 2019 on Nintendo Switch.

IPhone XR: Apple unveils iPhone XR starting at £749
Apple CEO Tim Cook speaks at the company's event in Cupertino , at which updated iPhones and a new smartwatch were unveiled. It is also running on the new 7nm A12 Bionic Chip and it retains the same 12MP f/1.8 main camera that's assisted with OIS.

Amazon's The Romanoffs Trailer
Some of them relish in the fact that they come from royal blood, while others find it problematic. The cast is impeccable, and this trailer teases a variety of different stories on tap.

Here's all the big news from today's Nintendo Direct
Ultimate, some more info about that new Yoshi game, and if you're feeling really lucky, an Animal Crossing Switch announcement. No word yet on what Luigi's Mansion 3 will be like, but I for one am excited to protect this poor plumber from further harm.

Wind approaches outer banks of North Carolina
This storm surge can be deadly and then the flooding that will come thereafter with rain being measured in feet instead of inches. People look out over the surf before Hurricane Florence comes ashore on Carolina Beach, North Carolina, Sept. 13, 2018.

Tropical Storm Joyce forms in Atlantic, Gulf disturbance still unnamed
Issac has been downgraded to a tropical storm and Hurricane Helene is still no threat to land. The current path has it making landfall somewhere between Brownsville and Corpus Christi.

Chelsea wrong to let Bakayoko go this summer says Fabinho
AC Milan have again been linked with the Blues midfielder, having been linked with him during successive transfer windows. But this could be too early to discuss as Fabregas has a very very large chunk of the season to turn the fortunes.

Stewart, Storm surge past Mystics 98-82 for WNBA title
It's not that my hunger for it went away or my motivation. "Even when she broke her nose she just never gave up", said Andrews. And we did that. "The talent has definitely improved", said Monique Currie, a 13-year veteran.

Stunning Weather Channel Video Shows Why Storm Surges Are So Dangerous
South Carolina's state capital Columbia is at only 89m (292ft). "We are totally prepared", Trump said at the White House. Screaming winds bent trees and raindrops flew sideways as Florence's leading edge battered the Carolina coast Thursday.

Hurricane Florence from space: "A no-kidding nightmare"
But it's forecast to strengthen to near the level of a Category 5 storm - which has sustained winds of 157 miles per hour or more .