Oil prices edge up on Iran sanctions, but trade tensions drag

Oil prices edge up on Iran sanctions, but trade tensions drag

U.S. oil output from seven major shale basins is expected to rise 93,000 bpd in September to 7.52 million bpd, the U.S. Energy Information Administration said on Monday.

Turkey's financial crisis has raised the risk of contagion throughout emerging economies, dragging down South Africa's rand, Argentina and Mexico's pesos as well as the Russian rouble.

Yet their shipped imports in July were about half a million barrels per day (bpd) below their Jaunary-June average of 12.4 million bpd, shipping data shows.

Despite the gloomy outlook for trade and the potential slowdown in economic growth, oil markets are expected to remain relatively tight, particularly as US sanctions on Iran have started.

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures finished slightly lower on Tuesday after giving back earlier gains.

Oil has stayed below $70 this month as fears of a trade war between the US and China weigh on prices, with neither side showing signs of backing down.

Some have predicted that Iranian output could drop to as low as 700,000 barrels per day (bpd), from 2 million bpd.

"The direct impact on global demand for oil is negligible", Fritsch said.

Ronaldo in hospital in Ibiza with pneumonia
Ronaldo scored 62 times for Brazil , including both goals when they beat Germany in the 2002 World Cup final. However the pneumonia is likely to have been triggered by an unrelated bacterial infection.

While the USA oil industry is experiencing a boom with the expansion of hydraulic fracturing techniques, energy drillers and fracking-related ETFs may slow down ahead with rising costs eating away at profits.

BMI Research said oil markets would "struggle for direction, as uncertainty around both the impact on supply from the Iranian sanctions and escalating trade tensions between the USA and China persists".

Oil futures fell more than $1 a barrel on Wednesday, pressured by a weaker global economic growth outlook and a report of rising USA crude inventories even as Washington's sanctions on Iran looked likely to curb that country's crude supplies.

Phillip Futures said that hedge funds had cut bullish bets on oil because of “rising production levels from OPEC and the United States”.

That was the highest level of drilling activity since March 2015. Yet, bullish sentiment found some support from expectations that looming US sanctions against Iran could significantly hamper its crude exports.

Also on Monday, a monthly OPEC report showed oil production in Saudi Arabia unexpectedly fell last month from June.

The US has started implementing new sanctions against Iran, which from November will also target the country's petroleum sector.

Opec, the cartel that pumps about a third of the world's oil, said its modelling suggested "that the tariffs, under the most likely case, will not have a significant..."

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