Published: Thu, September 13, 2018
Finance | By Loren Pratt

Brace for an oil market price rally in November: Details here

Brace for an oil market price rally in November: Details here

Crude oil prices gained traction on Tuesday and finally staged a decisive recovery with the barrel of West Texas Intermediate breaking above the $69 mark.

Oil prices rose on Tuesday as US sanctions squeezed Iranian crude exports, tightening global supply despite efforts by Washington to get other producers to increase output.

Outside the United States, traders have been focusing on the impact of US sanctions against Iran that will target oil exports from November.

"It was a mixed performance in the crude oil market", said ANZ bank in a note, pointing to Washington's sanctions against Iran's oil exports that will be enforced from November.

South Korea has made a decision to comply with US demands to cut oil imports from Iran to zero, becoming the first to do so out of the top three buyers.

"Going forward, economic uncertainty, and hence questions surrounding global oil demand, coupled with geopolitical tensions, will need to be factored into maintaining a balanced market in the months to come", the report said.

But the U.S. government does not want to push up oil prices, which could depress economic activity or even trigger a slowdown in global growth.

Brent crude futures climbed 38 cents, or 0.5 percent, to $77.75 a barrel.


U.S. Energy Secretary Rick Perry met Saudi Energy Minister Khalid al-Falih on Monday in Washington, as the Trump administration encourages big oil-producing countries to keep output high.

"This is a huge uncertainty on the market how countries, which buy nearly 2 million barrels per day (bpd) of Iranian oil, will act".

Their combined output has risen by 3.8 million bpd since September 2014, more than the peak output Iran has managed over the last three years.

Earlier today, according to the Russian news agency, TASS, Russia's Energy Minister Alexander Novak said that the OPEC and its allies could sign a new long-term cooperation deal when they meet in early December and added that output quotes could remain in place after 2018. Novak did not provide details.

"Iran is increasingly becoming the preoccupation of the crude market".

US oil producers are seeking new buyers for crude they used to sell to China before orders slowed because of the trade disputes between Washington and Beijing.

Iran's September exports are expected to plunge and "average as little as 1.5 million barrels a day in September according to the preliminary loading program, compared to around 2.8 million barrels a day of oil exports in April and May", Amrita Sen, chief oil analyst at Energy Aspects, said in a note to clients, carried by Bloomberg.

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