Oil pulls back from multi-year highs on China economy fears

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US President Donald Trump's withdrawal from a 2015 nuclear accord with Iran has driven oil to the highest since November 2014.

LONDON, May 15 (Reuters) - Oil prices hit a 3-1/2-year high on Tuesday, supported by tight supply and planned USA sanctions against Iran that are likely to restrict crude oil exports from one of the biggest producers in the Middle East.

Some oil analysts have said they expect Iranian crude exports to fall by as little as 200,000 barrels per day (BPD), while others put the figure closer to 1 million bpd (MMBPD).

In addition, there are downside risks to Iranian crude oil exports.

They've soared in the past few weeks ahead of President Donald Trump's decision on the Iran nuclear deal and continued to rise after he announced the US was dropping out of the deal. While those nations have vowed to stand by the agreement, there is little likeliness that USA allies would side with Iran in this issue.

On the supply side, Iran's impact on the global oil market has yet to be quantified or seen.

Brent crude futures, the worldwide benchmark for oil prices, were at $78.30 a barrel at 4.32am GMT, up 7c from their last close and not far off a three-and-a-half-year high of $78.53 a barrel reached the previous session.

"Germany has said it will protect its companies from USA sanctions, Iran has said French oil giant Total has yet to pull out of its fields and all the while it seems the Chinese are ready to fill the void created by the U.S".

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The cartel also said its output rose slightly last month, mainly via Saudi Arabia, but raised its demand forecast for next year by 25,000 barrels per day to average 98.85 million barrels per day.

The report is the last one before the oil ministers' meeting in Vienna to discuss the oil production ceiling two weeks later.

Since late 2017, longer-dated USA oil futures contracts are trading at prices lower than nearer-term contracts, a configuration known as backwardation, indicating that the market at least currently doesn't believe prices will continue to be as high as they are now, longer term.

In total, South Korea's April crude oil imports were 11.59 million tonnes, or 2.83 million bpd, up 2.5 percent from 11.30 million tonnes from 2017, according to the data. Sharenow also estimated oil to go beyond the $80 level in the short term.

Changes in oil supply and demand are expected to weigh on prices in the future.

The prospect of a drawdown in crude stocks should be supportive for prices along with the tight global supply situation.

U.S. shale oil production is expected to rise by about 145,000 bpd.to a record 7.18 million bpd.in June, the U.S. Energy Information Administration said on Monday.

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