Published: Fri, September 21, 2018
Money | By Ralph Mccoy

Oil near flat as market weighs US-China trade tensions, Iran sanctions

Oil near flat as market weighs US-China trade tensions, Iran sanctions

Speculation has also been swirling over whether a potential supply gap can be filled as American sanctions curb Iran's oil exports.

Iran is the third-largest producer among the members of the Organization of the Petroleum Exporting Countries (OPEC). That follows an announcement from the U.S. that it will impose a 10 per cent tariff on about $200 billion in Chinese goods next week.

Moreover, analytical wisdom holds that these three countries may have the production clout to offset the crude shortages resulting from the Iran sanctions and economic chaos in Venezuela; and on that score, some good news was delivered Monday by the Energy Information Administration, which reported that output from seven major shale formations in the U.S.is expected to rise by 79,000 barrels per day (bpd) to 7.6 million bpd in October.

Saudi Arabia and Russian Federation have held "hostage" the oil market as US President Donald Trump seeks to impose new sanctions on Iranian oil sales, a senior Iranian energy official has said.

US West Texas Intermediate (WTI) crude was down 15 cents, or 0.22 percent, at $68.76 per barrel. Tehran feels increasingly under pressure after President Donald Trump pulled out of the landmark nuclear deal between Iran and world powers in May.

NSD Logo The Organization of the Petroleum Exporting Countries, OPEC today said, Iran remains a very important member of the oil cartel as Tehran braces for a new round of USA sanctions, partially targeting its crude exports.

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Many were outside enjoying the lovely weather Wednesday, he said. "Whatever we have to do at the federal level, we'll be there". But it's impossible to say how deep the Lumber River is now, because the official river gauge stopped working a few days ago.

On Monday, Russia's Energy Minister Alexander Novak said that OPEC and non-OPEC members would discuss all possible supply scenarios when they meet this month in Algeria.

Crude has mostly stayed below $70 a barrel since mid-July as a trade dispute between the USA and China threaten global economic growth.

"There is a lot of concern about what winter is going to bring in terms of tight supplies when the Iran sanctions really kick in full blast", said John Kilduff, a partner at New York-based hedge fund Again Capital LLC.

Oil prices rose on Monday as investors focused on the impact of USA sanctions on Iran despite assurances by Washington that Saudi Arabia, Russia and the United States could together raise output fast enough to offset falling supplies.

Reuters previously reported that Saudi Arabia wants oil to stay between $70 and $80 a barrel for now, as the world's biggest crude exporter strikes a balance between maximizing revenue and keeping a lid on prices until us congressional elections.

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