Oil prices claw back some ground, but demand worries drag

Oil prices claw back some ground, but demand worries drag

Oil prices claw back some ground, but demand worries drag

"Russia and Saudi Arabia claim they seek to balance the global oil market, but they are trying to take over a part of Iran's share", Iran's governor of the Organization of the Petroleum Exporting Countries, Hossein Kazempour Ardebili, was quoted as saying by Tasnim news agency.

Following Chinese President Xi Jinping's call for a boost to national energy security amid trade tensions, the country's crude oil output rose in August for the first time in almost three years. The global benchmark fell 2 percent on Thursday after rising on Wednesday to its highest since May 22 at $80.13.

The rise in production was the cartel's biggest month-over-month rise in over two years and brought the group's total supply to a nine-month high. The first row of new sanctions against Iran were put in place in August, while more hard-hitting sanctions against the country's energy sector will take effect on November 4. OPEC is now supplying 32.7 million barrels a day, according to a Bloomberg survey, and that is with Iraq, Nigeria and Libya all producing near multi-year highs while their security situations deteriorate.

After the June meetings between OPEC and its friends there was a flurry of talk about restarting production at the fields in the Neutral Zone, shared between Saudi Arabia and Kuwait, but there has been little activity on the ground. The EIA left 2018 production and demand growth forecasts unchanged.

The EIA expects the trend to continue for the rest of the year as well as through 2019.

Cutbacks from Iran's production following the imposition of US sanctions did not provide an immediate enough catalyst for to support prices, he said.

Moreover, despite the increased August output, OPEC is also issuing a warning on the demand side of the oil markets equation.

In theory Saudi Arabia could immediately raise output to 11.5 million barrels a day-that's what Crown Prince Mohammed bin Salman told Bloomberg in April 2016.

Production has been relatively steady in Russian Federation and Saudi Arabia, both of which took part in an OPEC agreement to limit output beginning in 2016 to drive up prices.

Top refiner Indian Oil Corp wants to lift 6 million barrels each in September and October, while Mangalore Refinery and Petrochemicals would load 3 million barrels each for those two months, the sources said.

The price of crude, market analysts warned earlier this month, could shoot up by 30 percent to a huge $95 (£74) dollars a barrel.

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