Published: Tue, July 09, 2019
Finance | By Loren Pratt

Oil Minister Zanganeh says hopeful Iran's oil exports to improve

Oil Minister Zanganeh says hopeful Iran's oil exports to improve

"Geopolitical risks remain plentiful, but the start of the week could see Iran worries ease", said Edward Moya, senior market analyst at OANDA. OPEC and its allies, he adds, are "drawing a line in the sand for $50 oil so they can stabilize oil prices until demand picks up".

Oil fell on Tuesday amid worries over the outlook for demand after the latest signs that worldwide trade disputes have been dragging on the global economy, although the potential for conflicts in the Middle East offered support to prices. Price continues to trade between the 38.2% Fibo of the daily swing lows and highs and around the 20, 50 and 200 Experiential Moving Averages.

Oil markets posted weekly losses on concerns of weakening demand after data last week showed much smaller-than-expected decline in USA crude inventories.

Oil held gains as rising tension in the Middle East kept investors wary of potential disruptions, while expectations the US and China can make a breakthrough following the resumption of trade talks are low. -China trade war, heading into its second year, dampens prospects for global economic growth, which strongly impacts oil demand growth.

The market was shocked by the US crude output which was completely unexpected, he added.

Iran has denied China National Petroleum Corporation (CNPC) a request to suspend work on Phase 11 of the South Pars gas project, aiming for a clear-cut solution to the Chinese role in the huge gas field, Iranian Oil Minister Bijan Zanganeh said over the weekend.

Looking forward, a weekly release of the U.S. oil stocks change by a private industry survey the American Petroleum Institute (API) will offer an immediate catalyst to follow while trade /political headlines can keep dominating the price momentum.

The West Texas Intermediate for August delivery climbed 15 US cents to settle at 57.66 dollars a barrel on the New York Mercantile Exchange, while Brent crude for September delivery fell 12 cents to close at 64.11 dollars a barrel on the London ICE Futures Exchange.

OPEC and its nonmember partners, including Russian Federation, also agreed to support a charter to formalize the alliance.

However, promises of tighter OPEC supply extending into March 2020 limited losses in oil prices. For now, the charter is not a game changer, he says, since there likely will be no legal implications involved if one country cheats on its agreed-upon quota.

Results of a survey by Reuters news agency published Friday showed that a rise in Saudi supply in June came as output by the Organization of the Petroleum Exporting Countries (OPEC) fell to a new five-year low, mainly due to increased impacts of United States sanctions on key supplier like Iran.

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