Wednesday, 18 July, 2018

Seoul stops Iran oil imports as it seeks exemptions

Oil Prices Up on Weak US Crude Inventory Oil prices inch up in face of tight market
Nellie Chapman | 09 July, 2018, 23:44

Oil prices steadied on Monday as an increase in USA drilling, likely to lead to higher shale production, balanced evidence of tightening supply.

On Thursday, the US Energy Administration (EIA) announced that USA crude inventories had risen 1.2 million barrels in the week to June 29, to 417.88 million barrels. "There was pressure from the South Korean government to halt purchases", Reuters quoted an unnamed source familiar with Iranian shipping arrangements as saying.

On the green territory, the other metals are traded, with copper and platinum being the biggest increase in price - by 1.63% and 1.26% respectively.

West Texas Intermediate rose 61 cents to settle at $73.55, while Brent declined by 39 cents to $77 per barrel.

Although Saudi Arabia and Russian Federation have said they would raise output to make up for disruptions, FGE said “there simply is not enough capacity to make up for Iran's crude losses, plus Venezuela and Libya”, and warned of the possibility of oil prices rising to $100 per barrel.

Oil prices initially fell on Friday, along with Asian stock markets.

Even if the United States government grants some waivers to allies, FGE estimated 1.7-million to 2-million barrels a day of crude and condensate would be cut out of markets once its sanctions were implemented.

A rise in supply will reverse some of the output cuts that OPEC and other major producers put in place in early 2017 to end several years of glut. That blunted the impact of an escalating U.S.

In an early sign of future times, an executive from China's Dongming Petrochemical Group, an independent refiner from Shandong province, said his refinery had already cancelled US crude orders.

Brent was also being pressured by expectations of higher Saudi and Russian Federation productions, which impact Europe and Asia, where Brent is the benchmark, more than the markets dominated by the United States crude prices.

One option could be more shipments to India, which already has been buying more USA crude. The U.S. rig count, an early indicator of future output, was up by five in the week to July 6, according to General Electric Co's Baker Hughes energy services firm.

New rules ask gas suppliers to hold at least 5% of imports in storage by 2020, a policy that may be hastening buying demand at Chinese terminals.

The United States and China have started a trade war on Friday, introducing bilateral tariffs worth 34 billion Dollars, while not showing willingness to start talks with a view to reaching a ceasefire. In the week ending July 6, five new platforms have been put in operations, reaching a total 863 platforms, which is 100 more than previous year.