OPEC crude basket rises to $76.02

OPEC crude basket rises to $76.02

OPEC crude basket rises to $76.02

Oil has risen above $80 a barrel to its highest level this year amid concerns about supplies from Iran and a fall in USA stockpiles.

Brent futures rose as much as 1.4 per cent on Wednesday, while the U.S. crude benchmark added as much as 2.9 per cent. WTI futures gained 2.5 percent in the previous session.

Brent crude oil spot prices averaged 73 US dollars per barrel in August, down nearly 2 dollars from July.

It estimates that OPEC producers are now sitting on some 2.7 million barrels of spare capacity - 60 percent of which is in Saudi Arabia.

Output from OPEC member Iran in August hit its lowest level since July 2016, the IEA said, "as more buyers distanced themselves from Tehran ahead of looming U.S. sanctions", the report said.

In August the production by Iran dropped by 150,000 barrels per day to a total of 3.62 million, marking its lowest level in over two years, as buyers stopped ordering due to impending penalties by the U.S.

Regarding crude oil production, the EIA said on Tuesday it expected US output to rise by 840,000 barrels per day (bpd) between 2018 and 2019 to 11.5 million bpd, lower than a rise of 1.02 million bpd to 11.7 million that was previously forecast.

USA crude oil production C-OUT-T-EIA fell by 100,000 bpd, to 10.9 million bpd, as the industry faces pipeline capacity constraints. Rising output in Libya, Iraq, Nigeria and Saudi Arabia is offsetting declines in Iran, which faces new USA sanctions on exports, and in Venezuela.

India has clarified reports saying that it will be looking at the economics of the country, and not the politics, of importing the crude oil from the United States, while this import should not be seen as a replacement for Iranian vessels, said the Indian media.

Tanker data suggest Iranian crude exports are already off by about 500,000 bpd - some of it floating in tankers in the waters of the Gulf waiting to find ports to unload.

"Things are tightening up", the agency that advises Western governments on energy policy said in its monthly report.

Russian Energy Minister Alexander Novak on Wednesday warned of the impact of the USA sanctions against Iran.

Analysts expect the decline in Iran's crude exports to accelerate this month and next, putting upward pressure on oil prices.

"World demand will average 98.82 million bpd in 2018, a demand growth of 1.62 million bpd", said S&P.

Oil traders were also watching the progress of category 4 Hurricane Florence which is expected to make landfall by Friday.

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