Published: Sat, October 20, 2018
Finance | By Loren Pratt

Crude Oil Weekly Price Forecast - Crude oil markets have another rough week

Crude Oil Weekly Price Forecast - Crude oil markets have another rough week

Offering oil will be continued till November 4, the date when the second round of U.S. sanctions will be imposed, and the new decision about continuing selling crude oil in the stock market for export and some other details in this regard would rely on the made assessments and the gained experiences in this period, Kardor said.

But weaponizing oil production would break that understanding and provoke a backlash from consuming countries with a concerted effort to reduce their oil imports.

Oil prices fell on Wednesday, with USA futures settling below $70 a barrel for the first time in a month, after United States crude stockpiles rose 6.5 million barrels, nearly triple what analysts had forecast, while exports dropped.

Tankers carrying some 22 million barrels of Iranian crude are on their way to the Chinese port of Dalian, Reuters reports, citing ship-tracking data, and noting this is a record-high amount of crude from Iran to be received by Chinese clients amid falling imports to other large clients, such as Japan and South Korea.

Iran, the world's fifth biggest oil producer, exported about 2.5 million barrels of oil per day during the first half of 2018.

John Kilduff, founding partner at Again Capital, remarked, "That would be such a departure from their stated policy and stance towards the oil market; it's so much against their interest to do it".

USA crude oil imports averaged 7.6 million barrels per day last week, up by 218,000 barrels per day from the previous week.

This indicates rise in supply that would exceed demand, thus prices might remain in the range of $70 to $80 per barrel.

WTI's discount to Brent widened to its most since June 8, hitting $11.00 a barrel.

Oil prices also rose along with Wall Street. Putin said he prefers the price of oil to be in the range of $65 to $75 per barrel.

Those who are supporting the idea say that there are some reasons that offering crude oil in the stock market has not come true in the past; one is that it was planned to be offered in one step and private sector was not due to have any authority over it. However, Saudi circles deny this and assure us that they have the capacity to increase production in case of increased demand. The losses are expected to continue, but few analysts really believe the Trump administration will manage to cut Iran's exports to zero. "Price action and discovery suggests traders are no longer concerned about how high prices will go but rather how quickly they will fall".

The uncertainty about oil prices stems from psychological factors and geopolitical concerns as well as investor speculation.

While there were speculations claiming that India might face the USA sanctions after they had purchased the S-400 air defence system from Russian Federation, reports suggest that Washington has informally conveyed the New Delhi that they will be able to avoid the Countering America's Adversaries Through Sanctions Act (CAATSA) sanctions if they agree to purchase F-16 aircrafts from the United States.

This article is also available in Arabic.

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