Published: Wed, May 08, 2019
Worldwide | By Lisa Hogan

Oil falls near 2% as U.S.-China trade war intensifies

Oil falls near 2% as U.S.-China trade war intensifies

Trump administration believes that sanctions would either force Iran to return to the negotiating table for a more favorable nuclear deal to the U.S., or it would lead the Iranian government to collapse due to "fading revenues", according to reports.

An Iranian court has sentenced President Hassan Rouhani's brother to an unspecified jail term, state news agency IRNA reported on Saturday, in a corruption case the president's supporters allege is politically motivated.

OPEC producers have until June 25, when they meet next, to read the situation and assess the likely impact of ending U.S. sanctions waivers on Iranian crude exports.

U.S. West Texas Intermediate crude futures settled 13 cents higher, at $61.94 per barrel.

"We discovered a market and are selling oil in a grey atmosphere", the deputy minister said, stressing that the Islamic Republic will be "capable of resistance" if the government's policy requires.

Growing oil - and gas - costs might squeeze consumers, whose spending accounts for around 70 percent of USA economic output.

The price of gas in the US was already rising and the growth could raise prices further.

Tehran, however, announced that it would continue to sell its oil output, regardless of USA sanctions.

"The threat of military action with Iran appears to have heightened".

"We've seen that market tighten up considerably even before the Iranian information, and we are also seeing a range of refining problems in the USA", said Ryan Fitzmaurice, energy strategist at Rabobank.

Some analysts, however, predicted production curbs agreed by the Saudi-led Organization of the Petroleum Exporting Countries and other producers such as Russian Federation would continue to boost prices.

India's oil imports from Iran fell about 57 per cent year-on-year in April, according to tanker arrival data seen by Reuters, the last month when New Delhi was allowed to load Iranian oil ahead of USA sanctions stopping purchases of oil from the Opec member. The American Petroleum Institute was said to report US stockpiles jumped 6.81 MMbbl last week, much more than government data due Wednesday is forecast to show.

Some analysts, however, predicted production curbs agreed by OPEC and other producers such as Russian Federation would continue to boost prices.

Goldman Sachs said "the recent Brent pullback has taken prices too low in the face of tight fundamentals and growing supply risks, just as refiners come back from extended spring turnarounds".

In comments last week, Zamaninia emphasized that it is technically impossible to replace the lost share of Iran in the global oil markets. The Fars agency carried a similar report.

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