RBC Oil Market Will Tighten Amid Significant Loss Of Iran Crude

RBC Oil Market Will Tighten Amid Significant Loss Of Iran Crude

RBC Oil Market Will Tighten Amid Significant Loss Of Iran Crude

Oil markets have been halting further declines recently after the energy commodity fell too far, too fast on pumped-up production from OPEC, and supply constraints both within the United States overseas have seen oil markets quick to buy, implying that bullish oil traders, while sidelined on rising production, are remaining close at hand. "Yet, we remain much more concerned about the ongoing USA sanctions on Iran", analysts at Bank of America Merrill Lynch said in a research note published last week.

U.S. West Texas Intermediate (WTI) crude CLc1 futures increased by 6 cents, or 0.1 percent, to $67.72 a barrel.

Supply to the market - both domestically and for exports - may differ from production depending on the movement of barrels in and out of storage.

Analysts said widening of positions by participants amid pick up in spot demand against tight stocks position on restricted supplies from overseas markets mainly kept crude palm oil prices higher at futures trade.

The survey shows Saudi Arabia's output was below the 10.8 million barrels a day threshold that the kingdom was said to be indicating it would pump in July, suggesting demand for its oil isn't as strong as initially expected.

Brent crude futures were up $1 at $73.39 a barrel by 11:36 a.m. EDT (1536 GMT).

Low U.S. stockpiles were still providing a floor for prices, with overall U.S. crude inventories below the five-year average of around 420 million barrels.

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There were also factors holding oil markets in check.

OIL traded near $68 a barrel after sliding for two consecutive sessions as rising USA inventories and higher output from the Organization of Petroleum Exporting Countries (Opec) and Russian Federation weighed on the market.

"There are certainly worries about protectionism and its potential economic impact, but we also have to remember that the stimulus from tax cuts dwarfs the tax hit from higher tariffs", he said in a Friday report.

"At the moment, there is a mismatch in timing, where there is increasing OPEC supply and yet we're not seeing a significant reduction in Iranian supply", Patterson said.

Hedge funds and other money managers cut their bullish US crude bets in the latest week, as oil prices were range-bound, pinned between concerns about tight supply due to sanctions and fears that trade disputes could curb demand.

U.S. President Donald Trump has sought to ratchet up pressure on China for trade concessions by proposing a higher 25 percent tariff on $200 billion worth of Chinese imports. "This could severely dent the competitiveness of USA oil and derivatives in the Chinese market", said Abhishek Kumar, senior energy analyst at Interfax Energy. That's compared with a forecast for a 3-million-barrel decline in a Bloomberg survey of analysts.

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