OPEC crude production rose in August to the highest level this year as a recovery in Libyan output helped to offset a cut in Iranian exports due to US sanctions.
Crude oil futures for October delivery, which expired last Friday, were set for a gain in August, with the growth in the Brent benchmark price at its highest since April, Kallanish Energy learns. West Texas Intermediate (WTI) crude CLc1 futures rose 7 cents to settle at $69.87 a barrel after earlier hitting a session high of $71.40. U.S.
Anadarko Petroleum Corp said on Monday it had evacuated and shut production at two oil platforms in the Gulf of Mexico ahead of the approach of Gordon, which is expected to come ashore as a hurricane.
Iranian sanctions are due soon from the U.S., promising to further hamper oil markets.
Still, many Asian importers are continuing to plan for Iranian oil purchases despite the USA sanctions.
According to the Associated Press, the Iranian rial ended its weekly trading figures against the dollar at a stunning rate of 150,000 rials to just $1; the lowest level on record. "So we are looking at both sides of this discussion", Mohammed bin Hamad Al Rumhy told CNBC's Hadley Gamble Monday.
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The Iranian public has also been vocal about the weakening economy with protestors hitting more than 80 urban centres in the country, which has led to several deaths. Observed crude flows were the weakest since January.
David Maher, managing director for energy at commodity trading house RCMA Group, said Venezuela's "declines will continue" as a "lack of cash and infrastructural collapse (are) not easy to fix". Iranian oil exports fell 14 percent in August, according to tanker-tracking data compiled by Bloomberg.
The overall volume of the crude oil and condensate that is an ultra-light produced from the field of natural gas is estimated for 64M barrels (2.06M barrels/day), in against to the peak of 92.8M barrels (3.09Mbarrels/day). Investors anticipate less supply from Iran as USA sanctions on Tehran begin to bite.
Prices also pulled back from earlier highs after Cushing, Oklahoma, crude inventories rose almost 754,000 barrels from 24 August to Friday, traders said, citing a report from market intelligence firm Genscape. This signals tight market conditions as it gives traders an incentive to immediately sell oil instead of putting it into storage.
BNP Paribas expects Brent to average $79 in 2019.