Oil prices ease on potential supply hikes by Russia

Supply outages in Libya pushed oil prices higher late last week, although prices still ended down for a second straight week. Above, the El Sharara oilfield in Libya in 2014. (Reuters)
Updated 16 July 2018
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Oil prices ease on potential supply hikes by Russia

SEOUL: Oil prices fell on Monday as concerns about supply disruptions eased and Libyan ports resumed export activities, while traders eyed potential supply increases by Russia and other oil producers.
Brent crude futures were down 48 cents, or 0.6 percent, at $74.85 a barrel at 0302 GMT.
US West Texas Intermediate (WTI) crude was down 39 cents, or 0.6 percent, at $70.62 a barrel.
Supply outages in Libya and strike action in Norway and Iraq pushed oil prices higher late last week, although prices still ended down for a second straight week.
“Crude oil prices fell as fears of supply disruptions eased. News that Libya’s state oil producer had restarted output from a major oil field ignited the selloff earlier in the week,” ANZ Bank said in a note.
The market focus shifted toward possible supply increases, even as a Norwegian union for workers on offshore oil and gas drilling rigs stepped up a six-day strike.
“There are mixed supply signals and I think the (Brent) price is likely to be in the low-to-mid $70s range,” said Kim Kwang-rae, commodity analyst at Samsung Futures in Seoul.
“A summit between US President Trump and Russian President Putin is also being watched in case they say something about oil,” Kim said.
US President Donald Trump and Russian President Vladimir Putin are set to hold their first stand-alone meeting in Helsinki on Monday. Trump has been vocal about his dissatisfaction with higher oil prices, asking OPEC to lower prices.
Russia and other major oil producers may increase output further should supply shortages hit the global oil market, Russian Energy Minister Alexander Novak said on Friday.
Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA, said US-China trade tensions “should subside this week and could be a possible plus for oil prices,” but a possible sale of US oil reserves would hurt prices.
“With the Trump administration actively considering tapping into the nation’s Strategic Petroleum Reserve, it could weigh negatively,” Innes said.
The United States holds a reserve of about 660 million barrels, and the Trump administration was considering drawing on the country’s oil reserve, which would increase supply, according to a Bloomberg report.
Meanwhile, the number of rigs drilling in the United States was unchanged at 863 in the week to July 13 as the rate of the growth slowed amid a fall in crude prices.


Iran says Japan has started process of importing Iranian oil

Updated 32 min 18 sec ago
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Iran says Japan has started process of importing Iranian oil

  • Exemptions have been granted to Iran's biggest oil clients - Japan, China, India, South Korea, Taiwan, Italy, Greece and Turkey
  • Iranian oil accounted for 5.3 percent of Japan's total crude imports in 2018

LONDON: Japan has started the process of importing Iranian oil, which was suspended due to U.S. sanctions, the governor of Iran's central bank said on Monday.
The resumption of oil imports comes after Tokyo was granted a waiver from U.S. sanctions that went into effect in November. Iran is the fourth-largest oil producer among the members of the Organization of the Petroleum Exporting Countries.
"After China, South Korea, India and Turkey, Japan also started the process of importing Iranian oil," Abdolnaser Hemmati was quoted as saying by the state news agency IRNA.
Iran's oil exports have fallen sharply since U.S. President Donald Trump said in May 2018 the United States would withdraw from a pact curtailing Iran's disputed nuclear programme and reimpose sanctions on Tehran.
However, exemptions have been granted to Iran's biggest oil clients - Japan, China, India, South Korea, Taiwan, Italy, Greece and Turkey - which allow them to import some oil for another 180 days.
Iranian oil accounted for 5.3 percent of Japan's total crude imports in 2018.