Oil at 3-Year High amid Supply Risks

Technical Analysis Crude Oil

Crude oil continues to run. Up 1.9% on the day.

Stephen Innes of futures brokerage OANDA said the outage had contributed to a major draw in United States crude oil inventories.

The American Petroleum Institute (API) on Tuesday reported a large draw of over 9.2 million barrels in the USA crude oil inventories for the week ending June 22.

Nobkhat revealed that his government is creating an emergency budget which will be discussed by parliament along with the public budget.

Yesterday, oil gained over 3% after the initial announcement from the State Department announced that it would continue to implement the Iranian economic sanctions.

As such, the addition of 1 mb/d from Saudi Arabia alone would lead to the OPEC+ group exceeding the production levels they just committed to, after factoring in additions from Russian Federation and other Gulf States.

The US efforts to ban Iran's oil exports will be futile as it is not an easy task to block the country's crude from the global market, an Iranian oil official said on Wednesday.

President Donald Trump withdrew the United States from what he called a "defective" nuclear deal agreed between Iran and six world powers in July 2015.


Non-Opec members, led by Russian Federation, also came on board and there are forecasts of an extra million barrels per day of supply. "USA crude is certainly being looked at as it continues to remain competitive for us", an official from an OMC told Mint.

While India is the second largest crude customer for Iran behind China, Iran is the third largest source of crude for the country after Iraq and Saudi Arabia.

Despite this, French bank BNP Paribas said the "agreement to elevate output still leaves production restraints in place, limiting the market's ability to rebuild inventories". Record exports of USA crude last week indicated American producers were shipping out as much, if not more, oil than Iran, according to Bloomberg calculations. "This figure now stands at around 2.5 million barrels, and eliminating it easily and in a period of few months is impossible". But as the news about a jump in Saudi output filtered out, oil prices cooled.

Rapidly draining American surpluses are compounding real and envisioned supply interruptions in Canada, Iran, Venezuela and North Africa.

Stocks were also propelled upward by shares of consumer discretionary companies and by General Electric Co, whose shares rose 7.8 percent after the company said it would spin off its healthcare business and divest its stake in oil-services company Baker Hughes.

Saudi Arabia plans to pump a record 11 million bpd in July, up from 10.8 million bpd in June, an industry source familiar with Saudi plans told Reuters on Tuesday.

"It will be 1 million collectively", Falih said as he left the 22 June meeting, although the final communique did not mention that figure.

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