‘India seeks to continue importing Iran oil despite USA sanctions’

Muriel Colon
August 26, 2018

Official government data from the Energy Information Administration is due Wednesday, and could show a 2 million barrel decline in crude stocks, according to a survey of oil analysts conducted by The Wall Street Journal.

Around one hour after the report was released, West Texas Intermediate (WTI) October delivery traded at 67.40 US dollars at New York Mercantile Exchange, up 1.56 dollars or 2.37 percent from its Tuesday settlement.

Oil prices rose 3%, with Brent crude futures hitting a three-week high.

Oil also found support from a weaker dollar, which has slipped this week in response to U.S. President Donald Trump's comment that he was "not thrilled" by the Federal Reserve's interest rate increases.

API data has contrasted with gains in US crude oil and gasoline inventories reported by the EIA and lead to major swings downward for the price of oil.

According to the news report by Bloomberg, the price of oil went up despite low trading volumes, just ahead of the weekly crude oil supply data report in the US.

The EIA also said US oil production C-OUT-T-EIA was rising, reaching 11 million barrels per day last week.

Iran is the third-biggest producer in the Organization of the Petroleum Exporting Countries, supplying around 2.5 million barrels per day (bpd) of crude and condensate to markets this year, equivalent to about 2.5 percent of global consumption.

China's shipowners are shunning Iran's oil, while the OPEC producer is using its own tankers to supply top customers as impending U.S. sanctions threaten to disrupt global crude trade.

The American Petroleum Institute, an industry group, late Tuesday released data showing a 5.2 million barrel decline in USA crude oil stockpiles for the week ended August 17.

"The Iran issue continues to occupy traders' minds", said Greg McKenna, chief market strategist at futures brokerage AxiTrader. Saudi Arabia told Opec it cut supply in July, rather than increasing output as expected.

Global markets were weaker as the ongoing trade spat between the United States and China was seen as a drag on economic growth.

Worries that Mexico's incoming administration would not strike a bilateral agreement over NAFTA with the US also weighed on the market, traders said.

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