Economy

U.S. leeway sign on Iran oil

U.S. leeway sign on Iran oil

Even though the crude market of late has seen sporadic upward movement based largely on fear that USA sanctions against Iran and weekly US inventory draws herald a market tightening, it's hard to ignore fundamentals suggesting the reverse: and on Monday crude prices held steady as data revealed rising supplies and slowing demand.

Crude oil futures for October delivery, which expired last Friday, were set for a gain in August, with the growth in the Brent benchmark price at its highest since April, Kallanish Energy learns. U.S. WTI futures were trading at $70.06 per barrel as of 1:05 p.m. HK/SIN, up 0.37 percent.

As oil markets show growing global supply concern, Iraq is signaling the jitters may be overdone.

"We're asking all of our partners, not just India, to reduce to zero oil imports from Iran and so I'm confident that will be part of our conversation with India", the official told reporters, as the foreign and defence heads of the two countries met in the Indian capital.

However, the ongoing trade dispute, or what can now arguably be called a trade war, will continue to impact global oil markets perhaps long after the impact of US sanctions against Iran are factored into global oil prices.

According to OPEC's latest Monthly Oil Market Report with data for July, the UAE boosted its production by 69,200 bpd from June to 2.959 million bpd in July, as per OPEC's secondary sources.

Oil importers declined to confirm they were contingency planning for a halt in Iranian imports.

Public discontent and calls for regime change continue, as protests rock the country, putting pressure on President Hassan Rohani's government.

Prices had jumped the previous day as dozens of United States oil and gas platforms in the Gulf of Mexico were shut in anticipation of damage from tropical storm Gordon. At that level, the Shanghai contract had a market share for July of 14 percent, compared with 29 percent for Brent and 57 percent for WTI. USA markets were closed on Monday for Labor Day. Iran, facing the risk of declining sales of its biggest export, will try to close the Strait of Hormuz, a vital conduit for Middle East shipments, if its own flows are blockaded, a top military official said.

"The oil market is expected to trade within the current range".

The bank also said it expects Brent to average at $75 per barrel, a huge jump from its prior prediction of $55 per barrel.