OPEC has revised its forecast for global oil demand growth this year, noting that sanctions, tariffs, and the US withdrawal from the Iran nuclear deal point to rising uncertainty over the global economic growth momentum. High oil prices and low finding cost in the region which has relatively shallow wells help drive exploration in the farm belt where an average well produces 40-50 barrels-a-day over a 15-20 year life span.
Concerns over the impact of U.S. re-sanctioning on Iran apart from other factors like economic crisis in Venezuela are keeping the oil prices high.
While all eyes are riveted on Iran and the Middle East, the pace of Chinese oil demand growth could be the most underappreciated story in oil markets right now, Bloomberg Opinion columnist David Fickling writes.
It seems that this time around, the statement was uttered in connection with the movement within OPEC to prolong the cuts indefinitely, which some say is driven by the desire to boost prices even further and thus improve the bottom line of many members' economies. US Treasury Department has instructed countries to make significant cuts to their imports over the next six months to be considered for potential sanctions relief.
Elsewhere, supply concerns have been mounting over the last week after President Donald Trump the U.S. pulled out of the Iran nuclear deal - a move that reimposes sanctions on Iranian barrels.
So far this year, China has lived up to these expectations.
Torm operates 79 oil product tankers worldwide.
In the first four months of this year, South Korea's intake of Iranian oil dropped 34 percent to 4.69 million tonnes, or 286,308 bpd, versus about 7.1 million tonnes over the same period a year ago, the data showed.
Their forecast for 2018 was raised from $62 a barrel to $75 and that for the following year from $60 a barrel to $71.
The data poses worries that near-record high refinery runs may be short-lived.
These events surrounding the Middle East has pushed Brent crude to the highest level since March 2015, which is now at $7.3 per barrel.
While a huge accretion to Excess Crude Account is expected, public finance analysts also said the current situation will impact positively on the implementation of Nigeria's 2018 budget which was benchmarked on $45 per barrel and the production of 2.3 million barrels per day. March inventories were only 9m barrels above 5 year averages.
Iran will restart its uranium enrichment if it can not find a way to save the 2015 nuclear deal with the European Union after the United States pulled out last week, Tehran's government spokesman said.
Although "a lot of uncertainty" remained over the impact that U.S. sanctions would have on Iran's oil output (then at roughly 3.8m barrels per day), according to UniCredit, the geopolitical uncertainty would "not dissipate anytime soon".
The surge in oil prices comes at a time of tight supply amid record Asian demand and voluntary output restraint by the Organisation of the Petroleum Exporting Countries and non-OPEC producers, including Russian Federation. Looking at reactions in markets, crude oil prices were higher following the EIA report.
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