Published: Thu, October 18, 2018
Money | By Hannah Jacobs

Iran says Trump cannot bring oil prices down by 'bullying

Iran says Trump cannot bring oil prices down by 'bullying

The barrel of West Texas Intermediate gained traction in the post-settlement trade after the weekly data released by the American Petroleum Institute revealed a surprise draw in crude oil inventories in the U.S. As of writing, the WTI was up 0.66% on the day at $72.15.

The West Texas Intermediate for November delivery rose 0.44 USA dollar to settle at 71.78 dollars a barrel on the New York Mercantile Exchange, while Brent crude for December delivery added 0.35 dollar to 80.78 dollars a barrel on the London ICE Futures Exchange. The global benchmark is trading almost $7 below a four-year high of $86.74 reached on October 3. Senior officials on Monday had said that Indian oil companies have optional volumes built in their annual crude oil purchase contracts with suppliers like Saudi Arabia and Iraq that will be more than enough to make up for any shortfall in supplies from sanctions-hit Iran.

Overall, analysts forecast that USA crude stockpiles rose last week for the fourth straight week, by about 2.2 million barrels, according to a Reuters poll ahead of weekly inventory reports.

Saudi Arabia is the second largest supplier of crude to the US, with only Canada sending more. US crude was down 5 cents at $71.29.

I was on CNBC Asia on Sunday evening as oil prices jumped higher, discussing how the disappearance of Jamal Khashoggi was unlikely to impact energy flows between the USA and Saudi Arabia. The simmering diplomatic dispute occurred against the backdrop of USA sanctions on Iran that have hobbled exports by the Islamic Republic.

"To strengthen relations with India is a strategic priority of the Kingdom of Saudi Arabia", he said.

US President Donald Trump in May withdrew from the 2015 nuclear accord with Iran, reimposing economic sanctions against the Persian Gulf nation.

By around 1700 GMT, the price of Brent crude was down by more than 1.8% at $79.89, per barrel. As sanctions on Iran start up in a matter of weeks, China and India's key role in the global market is going to become even more in focus.

Gasoline stocks dropped by 3.4 million barrels, compared with analyst expectations in a Reuters poll for a 1.1 million-barrel decline.

State-run oil marketing companies (OMCs) have placed orders for importing crude oil from Iran next month when USA sanctions on Tehran are due to take effect, Petroleum Minister Dharmendra Pradhan said on Tuesday.

His comments come amid signs that Iran is scrambling to try to maintain its oil exports, which are declining so fast that the International Monetary Fund last week estimated they had already driven Iran's oil-fueled economy into recession.

Tom Kloza, longtime oil analyst at the Oil Information Service said the possible effect of the controversy on oil prices is on "everyone's radar" right now.

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