Brent hits 4-year high as U.S. sanctions on Iran tighten supply

Brent hits 4-year high as U.S. sanctions on Iran tighten supply ...
nasdaq.com 30/09/2018 Economy

Keywords:#Arabia, #Brent, #China, #General_Electric, #India, #Iran, #Iranian, #London, #Middle_East, #Nasdaq.com, #OPEC, #Organization_of_the_Petroleum_Exporting_Countries, #Reuters, #Saudi, #Saudi_Arabia, #Sinopec, #Tehran, #Venezuela, #Washington

* U.S. sanctions on Tehran limiting Iranian crude supply
* Sinopec halves Iran oil loadings under U.S. pressure-sources
* Saudi Arabia will pump more to fill deficit, sources say
By Stephanie Kelly
NEW YORK, Sept 28 (Reuters) - Oil prices rose more than 1percent on Friday, with Brent climbing to a four-year high, asU.S. sanctions on Tehran squeezed Iranian crude exports,tightening supply even as other key exporters increasedproduction.
Brent crude LCOc1 futures rose $1 to settle at $82.72 abarrel. The session high of $82.87 was the contract's highestsince Nov. 10, 2014. In the third quarter, Brent has gainedabout 4 percent.
U.S. West Texas Intermediate (WTI) crude CLc1 futures rose$1.13 to settle at $73.25 a barrel. The session high of $73.73was the highest since July 11. The contract is up about 5percent this month but down around 1 percent for the quarter.
A new round of U.S. sanctions on Iran, the No. 3 producer inthe Organization of the Petroleum Exporting Countries (OPEC),kick in on Nov. 4.
"Potential for a supply shock because of declining oilproduction in Iran and Venezuela will remain bullish on oilprices, and the second round of U.S. sanctions on Iran inNovember will further support the sentiment," said AbhishekKumar, senior energy analyst at Interfax Energy in London.
Washington is demanding that buyers of Iranian oil cutimports to zero to force Tehran to negotiate a new nuclearagreement and to curb its influence in the Middle East.
China'sSinopec Corp is halving loadings of crude oil fromIran this month, as the state refiner comes under intensepressure from Washington, said people with knowledge of thematter. urn:newsml:reuters.com:*:nL4N1WE3SU
However, India, another top buyer, is committed to buyingoil from Tehran, the Iranian foreign minister said. urn:newsml:reuters.com:*:nL4N1WD3W3
Other OPEC countries have been boosting production, butglobal inventories have still been falling, analysts said.
Saudi Arabia is expected to add oil to the market to offsetthe drop in Iranian production. urn:newsml:reuters.com:*:nL8N1WD5K3 Two sourcesfamiliar with OPEC policy told Reuters Saudi Arabia and otherOPEC and non-OPEC producers had discussed a possible productionincrease of about 500,000 barrels per day (bpd).
However, ANZ said in a note that major suppliers wereunlikely to offset losses from sanctions, estimated at 1.5million bpd.
At its 2018 peak in May, Iran exported 2.71 million bpd,nearly 3 percent of daily global crude consumption. urn:newsml:reuters.com:*:nL4N1WC3Q9
Looking to 2019, Saudi Arabia is concerned that rising U.S.shale production could create another glut, especially if astronger dollar and weaker emerging market economies reduceglobal demand for oil, sources familiar with OPEC policy say.
U.S. crude production rose 269,000 bpd to a record 10.964million bpd in July, the U.S. Energy Information Administrationsaid in a monthly report. urn:newsml:reuters.com:*:nL2N1WE15Z
However, drillers cut three oil rigs in the week to Sept.28, General Electric Co'sGE.N Baker Hughes energy servicesfirm said on Friday. New drilling has stalled in the thirdquarter with the fewest additions in a quarter since 2017 due topipeline constraints in the nation's largest oil field.
The Permian Basin is forecast to produce 3.5 million bpd inOctober, just below output from Iran, OPEC's third largestproducer.
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