Iranian rial hits record low against dollar on mounting economic woes

Iranian rial hits record low against dollar on mounting economic woes

Iranian rial hits record low against dollar on mounting economic woes

The producer cartel of the Organization of the Petroleum Exporting Countries (OPEC) said on Wednesday that it expected global oil demand to break through 100 million barrels per day for the first time later this year. U.S. WTI futures were trading at $70.06 per barrel as of 1:05 p.m. HK/SIN, up 0.37 percent. USA crude CLc1 was 10 cents higher at $69.90.

Front-month volumes in the crude futures have risen to trade nearly 2.8 million lots of 1,000 barrels in July.

Deputy Foreign Minister Abbas Araqchi warned on Tuesday that Tehran would withdraw from the nuclear deal if the Europeans fail by November 4 to design a mechanism to safeguard Iran's main interests, including oil sales and banking payments, in the accord.

Japan's efforts to get a waiver from Washington that would allow it to continue importing oil from Iran appear to have been unsuccessful, according to Jiji Press, who adds that Japanese oil companies are now forced to prepare to suspend Iranian imports and investigate ways in which they can switch to other Middle East producers. "Fears of an impending supply crunch are gaining traction".

After continuing imports, albeit at reduced levels, the buyers must now contend with the ever-closer November 4 deadline, when the United States will reimpose sanctions targeting Iran's crude industry.

Edward Bell, analyst at Emirates NBD bank, added: "Iranian production is already showing signs of decline, falling by 150,000 bpd last month". 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.

China surpassed the become the world's largest crude oil importer in 2017, importing 8.4 million barrels per day (b/d), compared with 7.9 million b/d for the U.S., according to the U.S. Energy Information Administration.

Indian state refiners, which drove India's July imports of Iranian oil to a record 768,000 barrels per day, had planned to almost double oil imports from Iran in 2018/19.

He forecasts an increase of as much as 30 percent in the U.S. WTI prices by the winter, with a break of the $75 per barrel level within a few weeks. Russian production has now surpassed the Soviet era peak above 11 million barrels per day.

"It isn't at all clear that such type of economic headwinds will topple oil prices given ... the constant barrage of supply outages", Innes said. This article is strictly for informational purposes only. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. It is not a solicitation to make any exchange in commodities, securities or other financial instruments.

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