Oil prices tick up as Hurricane Michael nears Florida

Cornelia Mascio
Октября 14, 2018

The weaker outlook comes as pressure is increasing on the Organization of Petroleum Exporting Countries and its allies to pump more to offset the impact of looming USA sanctions on Iran and Venezuela's collapsing oil industry.

In addition to shutting in wells, oil producers also halted most offshore drilling operations by evacuating three drilling rigs and moving eight others out of the storm area, BSEE said.

Still, oil traders generally agreed that the Iran sanctions are hitting harder than expected, with Jeremy Weir, chief executive officer of Trafigura Group Pte. forecasting 2 million barrels per day (bpd) lost to the market and Vitol and Gunvor Group pegging the volume closer to 1 million bpd.

The oil price rose in the past months due to the USA sanctions on Iran.

"The projections for 2019 clearly show a possible rebuild of stocks", he said of the supply and demand balance for next year.

The move prompted oil futures to tick slightly higher late in the day after coming under pressure from a bearish demand forecast. Some market experts say India is willing to keep buying oil from Iran because Tehran offers some discounts and incentives.

OPEC now forecasts average 2018 global demand of 98.79 million barrels a day in 2018, down by about 30,000 barrels from the previous month's estimate.

"It's a typical spillover effect and oil's been hit by the widespread sell-off in risk assets as the intensifying trade row stokes concerns over sluggish global demand", Will Yun, a commodities analyst at Hyundai Futures Corp., said by phone. As per to the primary tanker tracking data collected by Bloomberg, the exports of Iran's condensate and crude oil dropped down in last month to 1.72 Million bpd that was down by 260,000 bpd and the lowest level since February 2016.

Shipments into the country last month totalled 37.12 million tonnes, or 9.05 million barrels per day (bpd), up from 9.04 million bpd in August and their third straight monthly rise. They dropped 2.4 per cent in the previous session.

"There is no cause for alarm", Barkindo said at the Oil and Money conference in London.

"We are very concerned", Barkindo said when asked about spare capacity, citing a continued decline in oil industry investment resulting from a market downturn that began in 2014.

While Washington has said it wants to cut Iran's oil exports to zero, Iran and Saudi Arabia say that is unlikely.

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