Oil dips on ris­ing US sup­ply, but loom­ing Iran sanc­tions pre­vent big­ger fall

The Star Malaysia - StarBiz - - Foreign News -

SIN­GA­PoRE: Oil prices have dipped, pulled down by a re­ported rise in US crude in­ven­to­ries, although fall­ing ex­ports from Iran ahead of US sanc­tions pre­vented the mar­ket from sink­ing fur­ther.

In­ter­na­tional Brent crude oil fu­tures were at US$75.90 per bar­rel at 0611 GMT, down five cents from their last close.

US West Texas In­ter­me­di­ate (WTI) crude fu­tures were down four cents at US$68.49 a bar­rel.

In the United States, crude in­ven­to­ries rose slightly, by 38,000 bar­rels, to 405.7 mil­lion bar­rels in the week to Aug 24, in­dus­try group the Amer­i­can Pe­tro­leum In­sti­tute said on Tues­day.

“The API re­ported sur­pris­ingly flat num­bers to a mar­ket ex­pect­ing a rea­son­able draw in crude and a build in prod­ucts,” said Sukrit Vi­jayakar, di­rec­tor of oil con­sul­tancy Tri­fecta.

Of­fi­cial US fuel in­ven­tory and crude pro­duc­tion data will be pub­lished by the En­ergy In­for­ma­tion Ad­min­is­tra­tion (EIA).

De­spite the rise in US in­ven­to­ries, traders said crude prices have been rel­a­tively well sup­ported by the prospect of US sanc­tions against Iran, which will start to tar­get its oil in­dus­try from Novem­ber.

Bow­ing to pres­sure from Wash­ing­ton, many crude buy­ers have al­ready re­duced or­ders from Opec’s third big­gest pro­ducer.

Although Tehran is of­fer­ing steep dis­counts, Iran’s Au­gust crude oil and con­den­sate load­ings are es­ti­mated at 2.06 mil­lion bar­rels per day (bpd), ver­sus a peak of 3.09 mil­lion bpd in April, trade flows data on Thom­son Reuters Eikon showed.

An­other con­cern is cri­sis-struck Opecmem­ber Venezuela, where oil ex­ports have dropped by half since 2016 to below 1 mil­lion bpd.

To stem tum­bling out­put, Venezue­lan state-run oil firm PDVSA said on Tues­day it had signed a US$430mil in­vest­ment agree­ment to in­crease pro­duc­tion by 640,000 bpd at 14 oil fields, valu­ing the in­vest­ment at US$430mil. — Reuters

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