Oil Edges Up Ahead Of Looming Sanctions On Iran

Oil Edges Up Ahead Of Looming Sanctions On Iran

Oil Edges Up Ahead Of Looming Sanctions On Iran

Crude oil storage tanks are seen from above at the Cushing oil hub, in Cushing, Oklahoma, March 24, 2016.

The Brent crude oil - the global benchmark for oil prices - was trading at $78.01 per barrel, however, closed trading at $79.38 per barrel.

Nearly immediately, the US began reimposing sanctions against Tehran.

The two benchmarks have risen strongly over the last two weeks with Brent gaining more than 10 percent on expectations that global supply will tighten later this year.

"The prospects of increased supplies from OPEC and her allies, and weaker demand from China and other emerging markets could weigh further on oil prices going forward, or at least limit the upside potential", said Fawad Razaqzada, market analyst at futures brokerage Forex.

David Maher, managing director for energy at commodity trading house RCMA Group, said Venezuela's "declines will continue" as a "lack of cash and infrastructural collapse (are) not easy to fix".

There were no reports of damage by the coalition, in a tweet by Saudi-owned Al Arabiya TV, or the Houthis, in a tweet by their al-Masirah TV.

Investors anticipate less supply from Iran as USA sanctions on Tehran begin to bite.

There was also a typhoon hitting Japan's east coast overnight, with some damage to oil refineries in the Osaka region, although operator JXTG said its operations were not significantly affected.

According to reports by Japanese news media Jiji Press agency and Kyodo on September 3rd, the country's major oil wholesalers are preparing to suspend Iranian crude imports next month in response to US sanctions against Tehran and threats to companies doing business with Iran.

According to Barclays bank, worries over supply issues are becoming more evident.

Output from the producer cartel Opec rose by 220,000 barrels a day between July and August, to a 2018-high of 32.79-million barrels a day, a Reuters survey found.

For the first time in 3 weeks, 2 new oil rigs were added to USA oil production operations, taking the count of active oil rigs to 862.

Trump has threatened to up the ante even more, stating recently that he's ready to put new tariffs on all $505 billion worth of Chinese products imported to the U.S. The problem for China is manifold since it simply can't go toe to toe with the U.S.in a retaliatory tit-for-tat fashion since the U.S. imports almost five times the dollar value in goods from China than China imports from the U.S. According to the U.S. Census Bureau, China imported only $129.9 billion in U.S. goods past year compared to some $505 billion the U.S. imported from China.

Meanwhile, trade disputes between the United States and other major economies, including China and the European Union, are expected to hurt oil demand if they are not settled soon.

"Iraq has oil that's cheap and relatively easy to produce", Mustafa Ansari, a senior economist at Arab Petroleum Investments Corp., said in an interview in Muscat, Oman.

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