Oil dips as U.S. storm threat eases; Iran sanctions loom

Oil dips as U.S. storm threat eases; Iran sanctions loom”

The Brent crude oil - the worldwide benchmark for oil prices - was trading at $78.01 per barrel, however, closed trading at $79.38 per barrel. Finally, the maiden speech of the Fed's new chairman, Jay Powell, served to weaken the dollar and send oil prices upwards once again.

"There has been incredible USA refinery demand, and there has been huge US driver demand for gasoline".

The Iranian rial hit a record low against the US dollar on the unofficial market Monday amid a deterioration in the economic situation and the reimposition of sanctions by the United States.

Tehran is offering nearly free shipping and extended credit period, arranging for tankers and insurance after Indian firms including Shipping Corp of India (SCI) were forced to halt voyages to Iran due to U.S. sanctions.

Bahrain and Oman's oil and gas ministers both told CNBC Monday that China's demand for oil could decline on the back of its trade dispute with the USA that has seen tariffs imposed on a wide range of Chinese imports.

Russia's crude and condensate production averaged 11.21 million b/d in August, dipping 8,000 b/d from July, when the country cranked up production significantly, according to preliminary data released Sunday by the Central Dispatching Unit, the energy ministry's statistics arm.

While US sanctions are forcing many Western companies to cease trading with Tehran, two of its biggest customers have said they will continue to buy Iranian crude.

Oil price could rise 30%.

"All of Iran's oil customers are affected by increasing United States pressure to halt purchases, even as they request for concessions to cope with the consequences", said Den Syahril, a senior analyst at industry consultant FGE.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $70.04 per barrel at 0034 GMT, up 24 cents, or 0.3 percent from their last settlement.

Japanese refiner Cosmo Oil said Tuesday it does not plan to load any crude oil from Iran in October, while it is still monitoring the progress of bilateral talks between Japan and the U.S. to make a final decision on its Iran oil import policy.

Despite these fears, the global markets don't have much to worry about as they are still fairly well supplied. Gordon (currently a storm) is expected to develop into a hurricane. On Tuesday prices had climbed to $79.72, their highest since May. The market will look to other producers such as Russian Federation to fill the void, even as Nigeria's oil minister remains confident of OPEC's ability to pump more, said the Singapore-based analyst.

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