Oil prices edged lower yesterday as investors focused on deepening trade tension between the United States (U.S.) and China that is expected to dent global crude demand, but losses were limited as the market weighed potential supply tightening due to Iran sanctions.
Benchmark Brent crude already is nearing $80 a barrel and analysts believe it may go even higher as production remains low.
U.S. West Texas Intermediate crude was up 94 cents, or 1.4%, at $69.85/Bbl, off a session high of $70.42/Bbl.
Since spring when the Trump Administration said it would impose the sanctions, crude traders have priced in a risk premium reflecting the supply shortages that may occur when exports from Iran, the third-largest Organisation of Petroleum Exporting Countries (OPEC) producer, are cut.
US crude inventories fell 2.1 million barrels last week to 394.1 million barrels, the lowest level since February 2015, government data showed.
The news agency reported while Saudi Arabia had no desire to push prices higher than $80/Bbl, it may no longer be possible to avoid it. USA sanctions affecting Iran's petroleum sector are due to come into force from November 4.
Brent may fall more than $1 to $76.37 a barrel, while WTI crude prices may revisit their September 14 low of $67.94, he wrote.
Suge Knight to be sentenced to 28 years in prison
Knight, Carter and Sloan were longtime associates and Knight said the incident was an accident after a dispute got out of control. This media house does not correct any spelling or grammatical error within press releases and commentaries.
A committee of OPEC members and other producers is to meet on September 23 in Algiers to review compliance with their output targets.
Ministers from the Organization of the Petroleum Exporting Countries and non-OPEC producers meet on Sunday to discuss compliance with output policies. According to reports, Iran's crude exports are already falling as the USA prepares to curb Tehran's ability to sell oil and participate in global financial markets.
The U.S. moves have gotten furious reactions from Iran, especially amid talk of American officials asking Russian Federation and Saudi Arabia to make up the difference.
"But there's still a big question mark over China's United States crude purchases, which fell at one point to zero, there's a risk of Chinese tariffs on USA crude oil", Jakob said, which could weigh as U.S. output continues growing.
U.S. Energy Secretary Rick Perry said last week in Moscow that he did not foresee any price spikes once sanctions came into effect, and was positive about Saudi output.
-China trade tensions even as U.S. President Donald Trump is said to want $200 billion in China tariffs despite talks with Beijing.