Oil Falls on Gloomier Economic Forecast

Oil Falls on Gloomier Economic Forecast

Benchmark Brent crude oil was down $1.65 a barrel, or 2.1 percent, at $75.69 by 2:23 p.m. ET.

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

U.S. West Texas Intermediate (WTI) crude futures were firmer, however, at $67.16 a barrel, up 12 from their last settlement.

Speaking to Shana, Saeed Khoshroo, the director of worldwide affairs at NIOC, said the prices were charged based on the global oil prices; therefore, if the traded shipments were quoted lower during IRENEX Sunday session than the base price announced by NIOC in an earlier announcement, it was because of price fluctuations in the global market.

Oil capped its worst month in more than two years as concerns mount that the global economy will slow down.

"What is happening today is a lie that USA policymakers are telling the people of the world and the Americans that Iran's oil supplies should be replaced by Saudi Arabia so that oil prices would not rise", he said.

In this regard, NIOC released an announcement on Saturday, saying, "banks of Pasargad, Tejarat, Tose-e Saderat Iran, Sepah, Saderat, Mellat, Melli and Parsian are qualified to issue guarantees for crude oil trades in the stock market". "The second one is global economic growth momentum slowing down", IEA chief Fatih Birol told an energy conference in Singapore.

Crude output from the world's top three producers, Russia, the United States and Saudi Arabia now jointly account for a third of global oil supplies.

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Despite that, Hansen said "given the yet unknown impact on Iran's ability to produce and export (amid sanctions). we could see some speculative buying emerge ahead of November 4".

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

That has set off a scramble by some of Iran's biggest energy buyers, including China and USA allies such as India and Turkey, to either get around the US sanctions or make up the shortfall elsewhere.

Hedge fund managers continued to liquidate former bullish positions in oil last week, with signs of short-selling appearing for the first time in over a year.

"The fact that this price weakness is developing just ahead of the official kickoff of the Iranian oil sanctions suggests an amply supplied market in which additional supply was brought to market well in advance of a likely acceleration in Iranian export decline", Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.

The United States is preparing to re-impose a new set of sanctions on Tehran's oil and banking sector on 4 November.

This story has been published from a wire agency feed without modifications to the text.

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