Published: Fri, November 02, 2018
Money | By Ethel Goodwin

Brent oil dips on rising supply, global market woes

Brent oil dips on rising supply, global market woes

On the supply side, Iran has started selling crude to private companies via a domestic exchange for the first time, the oil ministry's news website reported.

Only 280,000 barrels were sold out of one million offered, and went for $74.85 per barrel, more than $4 below the initial asking price.

"We are determined to implement our policy of maximum pressure on Iran".

Even with USA sanctions on Iranian exports due to come into force on November 4, oil prices have fallen about $10 a barrel since four-year highs reached in early October.

In November, Iraq will halt trucking of oil to Iran to comply with the USA sanctions, five sources with knowledge of Iraqi oil export plans told Reuters last week.

The Iranian first vice president further described Trump's decision to restore Iran sanctions as illegal, stressing that the move was against the diplomatic success that had culminated in the 2015 Iran nuclear deal or the Joint Comprehensive Plan of Action (JCPOA) - as is technically known.

In other related news on Monday, the U.S. Energy Information Administration's latest analysis of planned refinery outages for the fourth quarter of 2018 finds that planned outages in the United States are not likely to cause a shortfall in the supply of petroleum products-including gasoline, jet fuel and distillate fuel relative to expected demand, either nationally or within any U.S. region.

The next date of offering crude oil at IRENEX has not been announced yet.

Industrial commodities such as crude and copper have also been rattled by hefty losses in global equities due to concern over corporate earnings, and fears over the impact to economic growth from escalating trade tensions, as well as a stronger dollar.

In North America, however, there is no oil shortage as United States crude oil production C-OUT-T-EIA has increased by nearly a third since mid-2016 to around 11 million barrels per day.

Around 300,000 bpd of crude oil previously pumped and exported in the Kirkuk province to the Turkish port of Ceyhan have been shut in since the Iraqi federal government moved in October a year ago to take control over the oil fields in Kirkuk from Kurdish forces.

Consultancy JBC Energy said the oil price weakness was "probably driven by the wider negative market sentiment amid speculation about additional USA tariffs on Chinese imports, should upcoming talks fail to produce the desired results".

Investors awaited industry data on USA crude inventories due to be released at 4:30 p.m. EDT on Tuesday.

Speaking at a ceremony in Tehran, Es'haq Jahangiri claimed that as a result of "planning" and "mechanisms" deployed by President Hassan Rouhani's government, the US will not reach its goal of completely cutting off Iran's oil exports. USA supply data also showed a sixth straight weekly rise in domestic crude inventories.

Prices were pressured as USA inventories were expected to rise for a sixth straight week as other top producers Saudi Arabia and Russian Federation signaled potential output increases.

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