Oil rises as US sanctions on Iran stir supply worries

A man pumps gas into his car at a gas station in Caracas

A man pumps gas into his car at a gas station in Caracas

Brent crude futures LCOc1 rose 66 cents, or almost 1 percent, to $74.41 per barrel by 12:20 p.m. EDT and U.S. West Texas Intermediate (WTI) crude futures CLc1 were up 27 cents at $69.28 a barrel.

Meanwhile, heatwave across Europe and other areas pushes oil up. However, Russia, the United States and the Saudi's are still producing 10 million to 11 million bpd of crude.

Oil prices rose on Tuesday ahead of the introduction of U.S. sanctions against major crude exporter Iran. U.S. West Texas Intermediate (WTI) crude futures CLc1 were up 29 cents at $69.30 a barrel, down from am earlier high of $69.83.

USA investment bank Jefferies said in a note that "the Saudi and Russian production surges appear to be more limited" than initially expected, adding that bullish market sentiment was also fuelled by the imminent reinstatement of U.S. sanctions against Iran.

"The market continues to price in geopolitical risk from the reimposition of sanctions by the US on Iran", said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.

"Saudi Arabia knows that the U.S. really does want to see maximum impact from sanctions towards Iran, which means that they want to prepare all buyers of Iranian crude to say 'there is plenty of oil in the market and don't be afraid to pull back on Iran (purchases)", said Bjarne Schieldrop, head of commodities strategy at SEB. "The reports that Saudi Arabia's production actually dropped in July continue to provide support for the market".

Hurricane Hector expected to miss Hawaii as it strengthens
Hurricane Hector is now 1,130 miles southeast of Big Island and moving west, according to the NHC's latest advisory . Hurricane Hector strengthened to a Category 3 hurricane Friday with maximum sustained winds of 120 miles per hour .

The main oil market price drivers of recent months have been output levels by top producers Russia, Saudi Arabia and the United States, renewed Iran sanctions, the US-China trade dispute, and unplanned supply disruptions.

Output was expected to rise 1.31 million bpd to 10.68 million bpd in 2018, lower than last month's forecast of growth of 1.44 million bpd to 10.79 million, the EIA said.

Also supporting prices were a weakened dollar, McGillian said. US Eastern time (0401 GMT) on Tuesday.

Europe-which as a whole has been Iran's third-biggest single customer-saw imports drop to 465,450 bpd last month from 485,768 bpd in June, with demand from France, Spain, and Turkey down and purchases from Italy and Greece steadily up.

Still, with Russian Federation, the United States and Saudi Arabia now all producing 10 million to 11 million bpd of crude, just three countries now meet around a third of global oil demand.

Much of the northern hemisphere has been gripped by extreme heat this summer, pushing up demand for industrial and residential cooling.

Recommended News

  • Longtime Manafort deputy Rick Gates admits embezzlement

    Longtime Manafort deputy Rick Gates admits embezzlement

    Rick Gates dropped a bombshell in his testimony against his former business partner, Paul Manafort , in federal court Monday. In court filings, Mueller has accused Kilimnik of having ties to Russian intelligence services, an allegation he has denied.
    Showtime's Halo Will Feature Master Chief

    Showtime's Halo Will Feature Master Chief

    Levine also spoke about the network's approach to the series and why Killen was chosen to be the show's primary writer. In the interview with GameSpot , Levine said , "It is futuristic space-based science fiction, it is not fantasy".
    Naz Shah slams Boris Johnson and accuses him of Islamophobia

    Naz Shah slams Boris Johnson and accuses him of Islamophobia

    The assistant secretary general of the Muslim Council of Britain, Miqdaad Versi, said Mr Johnson was "pandering to the far right". Middle East Minister Alistair Burt criticized Johnson on Tuesday for comments he said "many people would find offensive".
  • Everton new boy fires shots at Liverpool after rejecting Reds

    Everton new boy fires shots at Liverpool after rejecting Reds

    Silva said Digne is a "high-quality player, aggressive, with good technical ability. he is accustomed to winning". I progressed a lot as a player and as a person by playing with the best players in the world.
    RIP Karunanidhi: Modi, Rahul grieve Kalaignar's death on Twitter

    RIP Karunanidhi: Modi, Rahul grieve Kalaignar's death on Twitter

    Hardgrave Jr., Temple Professor Emeritus of the Humanities in Government and Asian Studies at the University of Texas, told CNN. Karunanidhi's response to medical intervention over the next 24 hours would determine the prognosis, the doctors said.
    SpaceX Re-Launches 'Block 5' Rocket for 1st Time, Nails Landing Again

    SpaceX Re-Launches 'Block 5' Rocket for 1st Time, Nails Landing Again

    After separating from the satellite, the Falcon 9 rocket successfully landed on a droneship in the Atlantic Ocean. Eastern from Cape Canaveral Air Force Base in Florida with Telkom Indonesia's Merah Putih satellite.
  • Ruby Rose Cast as The CW's Batwoman

    Ruby Rose Cast as The CW's Batwoman

    The Australian actress has landed the coveted, titular role role in Batwoman , which The CW is developing as a standalone series. Ruby Rose has been tapped to play Kate Kane/Batwoman, the first openly lesbian superhero on television, for The CW's Batwoman .
    Kendall Jenner 'Arrogant,' Uncaring After Dog Bites Girl, Grandfather Says

    Kendall Jenner 'Arrogant,' Uncaring After Dog Bites Girl, Grandfather Says

    Cape Town - Kim Kardashian is defending younger sister, Kendall Jenner after it was reported that her dog bit a young girl. The police were then called and referred the case to Animal Control.

    Samsung begins mass production of industry-first 4-bit consumer SSDs

    Samsung said its 4-bit 4TB QLC SSD maintains the same performance levels as a 3-bit SSD. The company added that it is also working on a 128GB QLC memory card for smartphones.
  • Everton set to announce Bernard signing

    Everton set to announce Bernard signing

    But Everton face a fight with French club Lyon to sign Barcelona's Colombian global centre-back Yerry Mina. Bernard is said to be favouring a move to Milan, with more meetings scheduled today.
    Cleaning crew finds dead baby on American Airlines plane

    Cleaning crew finds dead baby on American Airlines plane

    A statement from LaGuardia Airport said flights at Terminal B may experience delays due to an "out of service aircraft". The plane was later pictured being moved to a hanger as law enforcement began investigating the find.
    Ontario government to announce buck-a-beer plan

    Ontario government to announce buck-a-beer plan

    Brewers are not required to charge less, but Ford says that there will be various incentives for those that do charge less. Ford said he didn't think the lower prices would lead to more drinking and driving.

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.