Oil prices climb on tightening USA market

Friday, 06 Jul, 2018

Unable to bring in us dollars and euros ahead of the new USA sanctions that kick in in early November, Iran is open to accepting agricultural products and medical equipment in exchange for its crude oil, Iranian Labor News Agency (ILNA) quoted the spokesman of the Parliament's energy committee, Asadollah Gharekhani, as saying.

The Saudis said on Tuesday that they would increase production to offset what's not coming into the market from Venezuela and Iran (whose oil markets have been hobbled by sanctions), but did not say by how much. State Department official, noting that some key Iranian customers may be pressured into complying with American demands.

In a tweet on Saturday, Trump said Saudi Arabia had agreed to increase oil output by up to 2 million barrels, an assertion that the White House rowed back on in a subsequent statement.

"The OPEC Monopoly must remember that gas prices are up & they are doing little to help", Trump tweeted Wednesday.

Trump's abandonment of the Iran nuclear deal may have consequences for oil prices.

More so, expectations of a drop in the USA crude stockpiles due to be published by the EIA later on Thursday, following the bullish API crude inventories report, helps underpin the sentiment around the barrel of WTI.

America wants to cut Iran's oil exports to zero by November. Prices to (sic) high!

Norway-based Rystad Energy expects Iranian production to drop by 700,000 bpd by December 2018. Gasoline and distillate stocks, which include diesel and heating oil, were also down, the API said.

Libya's National Oil Corp (NOC) declared force majeure on loadings from Zueitina and Hariga ports on Monday, resulting in 850,000 bpd of supplies being disrupted.

Another day, another economic threat from Donald Trump.

"If Libya's oil doesn't return fast to the market it will be an important test to OPEC's spare capacity, especially given that output from Venezuela and Iran is expected to fall significantly in the next couple of months", he added.

The UAE was the fourth largest Opec producer with 2.89 million barrels per day in June after Saudi Arabia (10.3mbpd), Iraq (4.5mbpd) and Iran (3.7mpbd). The facility produced 253,000 bpd on average past year.

"Over the course of last week, downside risk to future Iranian oil supply has increased rapidly", Martijn Rats, global oil strategist and head of the bank's European oil and gas equity research, told CNBC.