WTI near $68 as Iran sanctions bite into supply | Markets & Investment

WTI near $68 as Iran sanctions bite into supply | Markets & Investment

WTI near $68 as Iran sanctions bite into supply | Markets & Investment

The barrel of West Texas Intermediate marched higher toward the $70 mark during the first half of the day but reversed its course in the NA session as the latest trade headlines raised concerns over the potential negative impact of the U.S. - China trade conflict on the world oil demand.

USA sanctions affecting Iran's petroleum sector will come into force from November 4 though many buyers have already cut their purchases, raising questions about how the market will make up the lost supply.

Stockpiles of distillate fuels, which include diesel and heating oil, rose by 1.5 million barrels, the API data showed, compared with expectations for a 651,000-barrel gain.

Official U.S. government data is due to be released on Wednesday.

Asked whether a deal between OPEC and other producers, a group known as OPEC+, could discuss increasing output from levels agreed in June, Novak said: "I think we have the possibility to discuss any possible scenarios". Russia, the world's largest oil producer, and other producers in OPEC have kept in place a supply agreement to maintain prices while at the same time providing enough oil to the market.

U.S. Energy Secretary Rick Perry said last week in Moscow that he did not foresee any price spikes once sanctions came into effect, and was positive about Saudi output.

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Oil prices firmed on Tuesday after Saudi Arabia indicated it was comfortable with a higher price range ahead of a meeting between major producing countries in Algeria.

Russia's Defense Ministry said a Russian military plane was shot down by Syrian anti-aircraft systems, but accused Israel of indirectly causing the incident, saying Israeli jets nearby had put the Russian plane in the path of danger.

Crude oil prices peaked at a near-term high of with WTI tapping into 70.40 on Tuesday, but was unable to make a challenge of last week's high of 71.25 after United States oil inventories showed yet another surprise build-up in their barrel counts yesterday.

However, the market was tempered by an escalation in the China-US trade war that has clouded the outlook for crude demand from the world's top oil consumers.

US President Donald Trump has called for the Organization of the Petroleum Exporting Countries members, primarily US ally Saudi Arabia, to raise their production, and warned importers to stop buying oil from Iran or face American sanctions.

Oil prices slipped on Tuesday morning in Asia as the US vowed to impose 10% tariffs on a further $200 billion worth of Chinese goods on Monday, which rattled the markets.

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