Published: Sat, November 10, 2018
Money | By Arnold Ball

Oil Prices Fall Over 1% To Hit Multi-month Lows

Oil Prices Fall Over 1% To Hit Multi-month Lows

Oil prices spiked in early October on fears that USA sanctions on Iran would thin out global petroleum supplies.

International Brent crude oil futures were down 21 cents, or 0.3 per cent, at $72.96 a barrel, while the U.S. West Texas Intermediate, WTI, crude futures were at $62.93 a barrel down 17 cents, or 0.3 per cent, from their last settlement.

Front-month Brent crude oil futures were at $71.85 per barrel at 0115 GMT, down 28 cents, or 0.4 per cent, from their last close.

The United States has been very careful and successful in applying maximum pressure on Iran through sanctions without allowing a spike in the oil price, U.S. Special Representative for Iran Brian Hook told reporters on Wednesday. But with harshest of sanctions imposed on Iran by the United States Iran has little choice to but to use ghost ships for oil exports. When they meet this weekend, the producers will have to contend with not only the threat of a glut, but also the risk to demand from faltering emerging-market economies and a trade war between the US and China.

China's producer price inflation slowed for the fourth month in October on cooling domestic demand, suggesting that economic momentum in the world's second-largest economy is softening in the face of simmering trade frictions with the United States.

China will be allowed to import about 360,000 barrels per day without triggering sanctions, Reuters reported, citing sources.

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"India is a major importer of crude oil from Iran".

In the USA, crude production increased to 11.6 million barrels per day last week, the highest level on record, according to Energy Information Administration data.

Producers including Saudi Arabia and Russian Federation had opened the taps earlier this year following unprecedented political pressure from Trump. He said the US has evidence that Iranian vessels are trying to evade USA sanctions by disabling location transponders used to prevent collisions.

For the first time, just three producers - the US, Russia and Saudi Arabia - now account for a third of global oil production and both the latter two have, like the US, been increasing production.

"I am not at the liberty to give you details about the quantum of crude oil that we will continue to import", Kumar added. "Opec and Russian Federation may use cuts to support US$70 per barrel", said Ole Hansen, head of commodity strategy at Saxo Bank. EIA now sees the nation's output averaging 12.1 million barrels per day (Mmbpd) next year, up from last month's forecast of 11.5 Mmbpd.

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