Commodities - Oil Prices Firm on Rising US Crude

  • Commodities - Oil Prices Firm on Rising US Crude

Commodities - Oil Prices Firm on Rising US Crude

Ehsan Khoman, head of Mena Research and Strategy at MUFG Bank, said the world's largest oil producers - Saudi Arabia, the USA and Russian Federation - continue to attempt to manage oil prices in-check primarily for geopolitical reasons, aiming to increase supply near-term to help lower (or at least prevent further rises in) oil prices, and their bilateral relationships among them are driving near-term oil markets.

But US bank JPMorgan said a warmer-than-usual fourth quarter, caused by a potential El Niño weather pattern, "can cause droughts, flooding and other natural disasters across the globe, including heatwaves in the US that affect commodities". Over the past 12 months, Exxon stock has traded up about 0.8%.

An Iranian newspaper reported that Foreign Minister Mohammad Javad Zarif said a USA plan to reduce Iran's oil exports to zero will not succeed.

Concerns over recent figures from Chinese crude oil exports have been weighing on traders' sentiment, although the descent should be somewhat tempered by rising speculations of further USA sanctions against Iran. On the New York Mercantile Exchange, West Texas Intermediate futures traded up 0.2% at $67.10 a barrel. In contrast, imports by Japan climbed by 2.30 per cent, on a month-on-month basis, compared to June imported quantities.

Total estimated export volumes on Aframaxes, Suezmaxes and VLCCs from Iranian ports in July fell by 7% to 2.32 million b/d from 2.49 million b/d in June, according to data from S&P Global Platts trade flow software cFlow.

Brent futures rose 90 cents, or more than 1 percent, to $74.65 a barrel by 1:38 p.m. EDT (1738 GMT), after hitting a session high of $74.90.

The direction of the WTI and Brent crude oil markets today will be determined by trader reaction to the key support zones. The contract surged 3.6 per cent on Tuesday after rising as much as their daily limit to a record.

Indian Oil agreed to buy 6 million barrels of US crude through the term-tender, taking its American crude purchases to 16 million barrels in total since April.

However, the price was modestly easier Wednesday ahead of official data from the US Energy Information Administration and it faces a significant barrier at the $70/barrel "round number". "Crude oil and refined products affected by additional duties will reduce their competitiveness in the Chinese market". China has vowed to strike back again, dollar-for-dollar, on the $16 billion tranche.

Exports to South Korea fell to zero as it is already starting to find alternative supplies to Iranian condensates after pressure from the US.