OPEC chief: Cartel must stay together as US sanctions Iran

OPEC chief: Cartel must stay together as US sanctions Iran

The upcoming deadline for US sanctions on Iranian oil and gas exports to come into effect in November could prove a challenge to global supply stability and reserves, particularly if there are any other significant outages in the system at the same time, according to the IEA.

Oil prices on Wednesday pulled back from gains racked up the previous day, pushed down amid a surprise climb in USA crude stockpiles.

Iran remains "a very important exporter of oil", said the chief of the Organization of the Petroleum Exporting Countries.

A group of oil-market analysts predicted in April that sanctions wouldn't cut exports by more than 800,000 barrels a day.

Prices in NY and London both rose as much as 2.2 percent in the previous session after Saudi Arabia was said to be comfortable with higher crude prices, at least in the short term, as the market adjusts to the loss of Iranian supplies.

US President Donald Trump called for OPEC members, primarily US ally Saudi Arabia, to raise their production, and warned importers to stop buying oil from Iran or face American sanctions.

At 0936 GMT, November WTI Crude Oil is trading $69.60, up $0.92 or +1.34% and December Brent Crude Oil is at $78.65, up $1.06 or +1.37%.

Brent crude LCOc1 futures rose 98 cents, or 1.3 percent, to settle at $79.03 a barrel.

Meanwhile, American Petroleum Institute data showed that crude stockpiles increased last week, while those in the storage hub at Cushing in Oklahoma fell.

Bloomberg reported that while Saudi Arabia had no desire to push prices higher than US$80, it may no longer be possible to avoid it.

Official inventory data from the US Energy Information Administration will be released on Wednesday.

U.S. Energy Secretary Rick Perry said last week in Moscow that he did not foresee any price spikes once sanctions came into effect, and was positive about Saudi output.

Russia's Defense Ministry said a Russian military plane was shot down by Syrian anti-aircraft systems, but accused Israel of indirectly causing the incident, saying Israeli jets nearby had put the Russian plane in the path of danger.

Meanwhile, oil output from seven major United States shale formations is expected to rise by 79,000 barrels per day to 7.6 million bpd in October, the U.S. Energy Information Administration said Monday. That follows an announcement from the U.S. that it will impose a 10 per cent tariff on about $200 billion in Chinese goods next week.

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