Published: Sat, September 22, 2018
Money | By Arnold Ball

OPEC chief says Iran still ‘very important as U.S. sanctions loom

OPEC chief says Iran still ‘very important as U.S. sanctions loom

Bloomberg reported on Tuesday, citing unnamed Saudi sources, that the kingdom was now comfortable with prices above $80 per barrel, at least for the short term. A committee of OPEC members and other producers is to meet on September 23 in Algiers to review compliance with their output targets.

In 2016, major producers both within and outside the Organization of the Petroleum Exporting Countries agreed to slash production in an attempt to boost prices following the 2014 oil market crash.

According to reports, Iran's crude exports are already falling as the USA prepares to curb Tehran's ability to sell oil and participate in global financial markets.

The agency raised its demand growth outlook for next year by a modest 110,000 barrels per day (bpd) to 1.5 milllion bpd, but warned that considerable uncertainties cloud the forecast, with potential supply disruptions likely to cool demand if prices spike too high. It's unclear, however, whether the Saudis discussed prices with Russian and American officials. Iran's share of OPEC revenues increased to 10% in 2017 to its highest level since 1999, recovering from declines from 2012 through 2015 that resulted from sanctions targeting Iran's oil exports.

Oil prices were steady on Wednesday as concerns that producers will not be able to respond to a shortfall in supply once US sanctions on Iran are enacted outweighed a gain in stockpiles in the United States, the world's biggest oil user.

Champions League: Messi scores hat-trick fires Barcelona to victory
PSV Eindhoven coach Mark van Bommel insists there's no reason for panic after their thrashing by Barcelona . Messi opened the scoring with a free kick and scored two more late on after Ousmane Dembele's solo effort.

Meanwhile, oil output from seven major United States shale formations is expected to rise by 79,000 barrels per day to 7.6 million bpd in October, the U.S. Energy Information Administration said Monday.

"Things are tightening up", said the Paris-based IEA.

Reuters previously reported Saudi Arabia wants crude to stay between $70 and $80/Bbl maximizing revenue and keeping a lid on prices until US congressional elections. But they cut output slightly in July, and kept it roughly stable in August.

US oil futures surged almost 2 percent on Wednesday as they were bolstered by a fifth weekly crude inventory drawdown and strong domestic gasoline demand amid ongoing global supply concerns over USA sanctions on Iran that come into force in November.

Stockpiles of distillate fuels, which include diesel and heating oil, rose by 1.5 million barrels, the API data showed, compared with expectations for a 651,000-barrel gain.

Like this: