Oil Set for Worst Month in 2 Yrs.

03 November, 2018, 05:14 | Author: Kevin Carter
  • An Iranian warship

Oil prices picked up on Wednesday morning in Asia, despite the U.S., Russian Federation and Saudi Arabia pledging to raise crude output just days before sanctions against Iran take effect.

WTI (oil futures on NYMEX) is back into the red zone and looks set to test the 63 handle, as the sentiment remains dampened by mounting concerns over rising crude output from the world's top 3 oil producers - Russia, the U.S. and Saudi Arabia.

Both benchmarks were about $10 a barrel below four-year highs reached on October 3.

Brent Crude Oil price at London's IСE Stock Exchange down by 1.07% to $76.04 per barrel. That's also the worst drop since July 2016.

However, the effects of the USA withdrawal from the Joint Comprehensive Plan of Action (JCPOA) in May, the resumption of Iran sanctions and the potential response from other countries pose significant uncertainty to the forecast.

"The market's reaction isn't strongly negative because the US administration hasn't actually gone soft on Iran", said Harry Tchilinguirian, head of commodity-markets strategy at BNP Paribas SA.

There's at least one similarity between 2016 and 2018: The oil market experienced strong gains in the first six months of the year before hitting a volatile patch in the second half.

On Friday, crude oil futures prices of the United States gained 0.39 percent on concerns over less supply from Iran.

Yet over the past 20 trading sessions, oil and stocks both peaked in early October and both have lost almost 10 percent through the end of the month. "This is the highest correlation I've seen in quite some time".

More news: Alec Baldwin Allegedly Punches Man Over Parking Space

Oil has been caught in the global financial market slump this month, with equities under pressure from the trade conflict between the world's two largest economies, according to Asian Oil & Gas.

Trump said he would like to make a deal now but that China was not ready. The last week of October saw crude oil continue to trade bearish owing to firm Dollars in broad market and bearish equity markets putting pressure on purchasing power of investors from Asia and other emerging markets. The second week saw United States crude oil open bearish but price edged higher up owing to news of partial shutdown of oil rigs in Gulf of Mexico owing to hurricane Michael and reports of falling crude exports from Iran ahead of U.S. sanctions as investors worries that USA demand for oil embargo could result in significant supply shortfall.

The US administration has agreed to allow eight countries to continue purchasing Iran's crude oil after Washington's sanctions on Tehran take place next Monday, a senior official said Friday.

At the same time, forecasters now think oil consumption growth will be weaker than previously anticipated.

Previously, Pompeo had said it was "our expectation that the purchases of Iranian crude oil will go to zero from every country or sanctions will be imposed", but also acknowledged that waivers were being negotiated with nations that said crude from the Middle East producer was critical to their energy industry.

Clayton Allen of Height Securities said Iran's biggest oil customers, all in Asia, were seeking waivers to US sanctions against Iran's petroleum exports.

The Permian region, which is located in western Texas and eastern New Mexico, accounts for about 63 percent of total Texas crude oil production and 95 percent of total New Mexico crude oil production. "We can not end oil imports from Iran at a time when alternatives are costly", noted the Indian government, as quoted by Reuters.

Structurally oil prices remain bearish as the Brent curve moves deeper into contango (Spot price lower than forward price). Brent was up 29 percent over the same period.

Recommended:

  • Saudi Journalist Jamal Khashoggi Was Strangled in Premeditated Attack, Says Turkish Prosecutor

    Saudi Journalist Jamal Khashoggi Was Strangled in Premeditated Attack, Says Turkish Prosecutor

    On Tuesday, Turkish President Recep Tayyip Erdogan called upon the Gulf country to expose the people who sanctioned the murder. The murder of the journalist Jamal Khashoggi could not be made without the approval of senior officials of Saudi Arabia.
    Oprah campaigns for Democrat Stacey Abrams for Georgia governor

    Oprah campaigns for Democrat Stacey Abrams for Georgia governor

    She added that Abrams is "standing strong for the values that matter to me and the values that matter to Georgians all over this state".
    Pakistan to bat first in final T20I against Australia

    Pakistan to bat first in final T20I against Australia

    We wanted to carry forward the momentum to the New Zealand series, the way we bowled and took our catches was superb tonight". Shaheen Afridi, Fakhar Zaman have been replaced by Usman Shinwari and Sahibzada Farhan .
  • USA  charges financier, former Goldman bankers for 1MDB

    USA charges financier, former Goldman bankers for 1MDB

    The sovereign wealth fund was set up in 2009 to pursue investment and development projects for the economic benefit of Malaysia. It says initially a $1 billion investment was diverted and in subsequent phases money was siphoned from sales of 1MDB bonds.
    The Most Over-the-Top Costumes From Heidi Klum's Crazy Halloween Party

    The Most Over-the-Top Costumes From Heidi Klum's Crazy Halloween Party

    Although, the main argument from parents seems to focus more on how the holiday celebration affects schedules. Every year, we sing the praises of each costume and convince ourselves it's the best one yet.
    Anderson wins Vienna title to seal Finals spot

    Anderson wins Vienna title to seal Finals spot

    After closing out the first set, Anderson brought the second set to a tiebreak where his big serving made the difference. It's been a huge goal of mine all year", Anderson said after lifting the trophy.
  • Donald Trump predicts trade deal with China

    China's Premier Li Keqiang, right, speaks next to Tennessee Senator Lamar Alexander during a meeting with a group of U.S. Earlier Friday, the Chinese foreign ministry said Trump and Xi had an "extremely positive" phone conversation Thursday.
    Pakistan jumps to 136th place on WBs Doing Business list

    Pakistan jumps to 136th place on WBs Doing Business list

    In the report , Kenya was ranked 61 globally as a country with an environment that encouraged business and investments to thrive. New Zealand tops the list of 190 countries in ease of doing business , followed by Singapore, Denmark , and Hong Kong.
    US President Donald Trump suggests he will end birthright citizenship soon: Axios

    US President Donald Trump suggests he will end birthright citizenship soon: Axios

    But Trump said he has talked to his legal counsel and was advised he could enact the change on his own. "We are in the process". It was unclear what specific action his order would pursue, and Trump gave no details. "That's what you're talking about".
  • Brent oil prices dips on rising supply, global market woes

    Brent oil prices dips on rising supply, global market woes

    Front-month Brent crude oil futures LCOc1 were at 77.96 dollars a barrel, up 35 cents, or 0.2 per cent, from their last close. Both contracts have fallen about $10 a barrel from four-year highs reached in the first week of October.
    Bus plunges into river in China, after fight between driver and passenger

    Bus plunges into river in China, after fight between driver and passenger

    Four passengers who got off the bus confirmed that a 48-year-old woman argued with the driver because she had missed her stop. The official Xinhua News Agency said 13 bodies have been retrieved from the river and two others remain missing.
    Plot to Smear Mueller Unravels as FBI Is Asked to Investigate

    Plot to Smear Mueller Unravels as FBI Is Asked to Investigate

    On Twitter, Wohl denied any attempt to discredit Mueller and said a smear campaign had been launched against him. Burkman claims to represent a woman who he said will make an allegation against Mueller public on November 1.


Popular

Barbra Streisand Warns James Corden About Her Driving on ‘Carpool Karaoke’
Streisand also talked about the time she used Steve Jobs as her personal computer expert. Streisand never mentions the president by name, but she doesn't have to.

Brock Lesnar Wins The Universal Championship At WWE Crown Jewel
The WWE is hosting a major event in Saudi Arabia on Friday absent two of its biggest pro-wrestling stars. The event will be live on Sony Ten 1, Sony Ten 1HD (both English) and Ten 3, Ten 3HD (both Hindi).

Oil under pressure from rising output, but Iran sanctions loom
Despite these efforts, analysts said any potential Iranian oil sanction waivers would likely only be temporary. President Donald Trump withdrew from the deal in May, describing it as "defective at its core".

Israel army says did not know fatal Gaza strike targets were children
The Gaza Strip faces a severe electricity shortage, high unemployment and lack of clean water, among other humanitarian concerns. At least 218 Palestinians have been killed by Israeli fire in the months of demonstrations and clashes.

Chelsea boss Sarri hails young trio ahead of Cup clash
Chelsea manager Maurizio Sarri has made eight changes to the side which thrashed Burnley 4-0 in the Premier League on Sunday. Predicted Derby County XI: Carson; Bogle, Tomori, Keogh, Forsyth; Wilson, Huddlestone; Waghorn, Mount, Lawrence; Nugent .

Philadelphia Eagles Just Landed Another Weapon For Carson Wentz
The pair briefly talked over each other until Patricia said, "Ask me a question professionally, and I'll answer it for you". The Eagles announced the trade a short time later, and the Lions confirmed they will receive a third-round pick in return.

Meghan Markle Has Wardrobe Malfunction in See-Through Skirt
Harry and Meghan watched as they were given a health check by Ms Bean and executive director of Kiwis for Kiwis Michelle Impey. Dressed casually in jeans and rainboots they got stuck into the activities and games, which included planting a Kowhai tree.

Statue of Unity Stirs Controversy Right on the Inauguration Day
Where is Sardar Patel's Statue of Unity? The shawl across Sardar Vallabhbhai Patel's shoulders accentuates his stately bearing. Vasava told the Post almost a million tribal people would not cook food on Wednesday as a mark of protest.

Autonomy of Reserve Bank 'essential', says finance ministry
Following this, the finance minister blamed the RBI for its lending spree between 2008 and 2014 that left banks with huge debts. Indian markets clawed back some early losses after the statement but still appeared tentative.

Nintendo's Earnings Rise on Continued Switch Success
During the six-month period ended September 30, Nintendo's sales were up 4% year-over-year to 388.9 billion yen ($3.4 billion). Nintendo hasn't announced a new Mario Kart for the Switch, but it is working on one for smartphones.