OPEC to Focus on Oil inventory While Others Debate Iran Sanctions Impact

OPEC to Focus on Oil inventory While Others Debate Iran Sanctions Impact

The West Texas Intermediate (WTI) for June delivery was up 35 USA cents to settle at 71.31 dollars a barrel on the New York Mercantile Exchange, while Brent crude for July delivery rose 20 cents to close at 78.43 dollars a barrel on the London ICE Futures Exchange.

"U.S. sanctions on Iran take center stage in the oil market", said Norbert Ruecker, head of macro and commodity at Julius Baer Group Ltd.in Zurich.

The supply is greater in the U.S. were production has now seen a large increase in production bringing the total of barrels produced per day to 10.7m.

While it is still unclear how USA sanctions will affect output from the third-largest OPEC producer, the move has helped oil prices rise.

It's certainly not the first time a member made the statement, but apparently Suhail bin Mohammed al-Mazroui, oil minister for the United Arab Emirates thought it was worth repeating when he told delegates to an industry event in Abu Dhabi that the Organization of the Petroleum Exporting Countries (OPEC) is focusing on inventory rather than targeting a specific oil price.

Crude futures hit the highs as the markets anticipated a sharp fall in Iranian crude supply once USA sanctions take effect later this year.

The tightening market has all but eliminated a global supply overhang which depressed crude prices between late 2014 and early 2017.

Surging prices were capped after China reported weaker-than-expected investment and retail sales in April and a drop in home sales, clouding its economic outlook even as policymakers try to navigate debt risks and defuse a heated trade dispute with the United States.

Israel PM Benjamin Netanyahu says Iran crossed 'red line' with rocket fire
An Israeli warplane was shot down during the battle. "We did not come to the Iranian border, they came here", he said . Last month, an attack on Syria's T4 air base in the central Homs province killed seven Iranian military personnel.

Demand for oil drastically increased prices and has resulted in oil prices increasing by more than 70 per cent over the past year.

It remains unclear how hard USA sanctions will hit Iran's oil industry.

Greg McKenna, chief market strategist at futures brokerage AxiTrader, said, "Around a million barrels of oil a day is likely to disappear from global oil markets if the USA sanctions on Iran bite".

OPEC figures published on Monday showed that oil inventories in OECD industrialised nations in March fell to 9 million barrels above the five-year average, down from 340 million barrels above the average in January 2017.

"We expect the EIA report to display bearish results amidst higher rig counts and production levels in the USA", said Singapore-based brokerage Phillip Futures.

Official U.S. government fuel storage data is due for release by the Energy Information Administration (EIA) later on Wednesday.

This story has not been edited by Firstpost staff and is generated by auto-feed.

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