Brent oil rises to 4-year high ahead of Iran sanctions, traders eye more hikes

Approximately 1.5 million barrels per day of Iranian oil will effectively be out of the market on November 4 once the US sanctions kick in. (AFP)
Updated 01 October 2018
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Brent oil rises to 4-year high ahead of Iran sanctions, traders eye more hikes

  • Brent was pushed up by looming sanctions against Iran, which will start targeting its oil sector from November 4
  • With oil prices soaring, there are concerns over their inflationary effect on demand growth

SINGAPORE: Brent crude oil prices rose to their highest since November 2014 on Monday ahead of US sanctions against Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), that kick in next month.
Benchmark Brent crude oil futures rose to as much as $83.27 a barrel and were at $83.21 at 0339 GMT, up 48 cents, or 0.6 percent from their last close.
US West Texas Intermediate (WTI) crude futures were up 32 cents, or 0.4 percent, at $73.57 a barrel.
WTI prices were supported by a report on Friday of a stagnant rig count in the United States, which points to a slowdown in US crude production, which now rivals top producers Russia and Saudi Arabia.
Brent was pushed up by looming sanctions against Iran, which will start targeting its oil sector from November 4.
ANZ bank said on Monday that “the market is eyeing oil prices at $100 per barrel.”
In a sign that the financial market is positioning itself for further price rises, hedge funds increased their bullish wagers on US crude in the week to Sept. 25, data from the US Commodity Futures Trading Commission (CFTC) showed on Friday, increasing futures and options positions in New York and London by 3,728 contracts to 346,566 during the period.
In a further sign of the impact that the US sanctions on Iran will have on the market, China’s Sinopec said it is halving loadings of Iranian crude oil this month. China is the biggest buyer of Iranian oil.
“If Chinese refiners do comply with US sanctions more fully than expected, then the market balance is likely to tighten even more aggressively,” Edward Bell, commodity analyst at Emirates NBD bank wrote in a note published on Sunday.
“We’re going to find out very soon as approximately 1.5 million barrels (per day) of Iranian oil is effectively going offline on Nov. 4. If the market senses that Saudi Arabia capacity is tapped out at 10.5 million bpd ... oil prices will rocket higher with the flashy $100 per barrel price tag indeed a reasonable sounding target,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore..
With oil prices soaring, there are concerns over their inflationary effect on demand growth, especially in Asia’s emerging markets where weakening currencies are further adding to high fuel import costs.
Add the trade disputes between the US and other major powers, especially China, and economic growth into 2019 could be eroded.
Growth in China’s manufacturing sector already sputtered in September as both external and domestic demand weakened, two surveys showed on Sunday.
In Japan, business confidence among big manufacturers declined in the last quarter its lowest in nearly a year, as firms felt the pinch from rising raw material costs and as global trade conditions worsened.


Twitter triples first-quarter profit to $191 million

Updated 23 April 2019
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Twitter triples first-quarter profit to $191 million

  • Profits in the first quarter hit $191 million, compared with $61 million a year earlier
  • The longstanding metric of monthly active users was 330 million in the January-March period

WASHINGTON: Twitter said Tuesday its profits tripled in the past quarter even as it ramped up efforts to root out abuse and misconduct on its short messaging platform.
Profits in the first quarter hit $191 million, compared with $61 million a year earlier, while revenues increased 18 percent to $787 million.
Twitter’s global user base appeared to show modest growth even as the company transitions to a different way of measuring it.
The longstanding metric of monthly active users was 330 million in the January-March period, an increase of nine million from the past quarter but down slightly from a year ago.
But Twitter no longer will use that measure, switching instead to “monetizable” daily active users — 134 million in the past quarter, up from 120 million last year.
Chief executive Jack Dorsey said Twitter is benefiting from its moves to root out abusive and inauthentic content that had hurt Twitter’s reputation.
“We are taking a more proactive approach to reducing abuse and its effects on Twitter,” said Dorsey.
“We are reducing the burden on victims and, where possible, taking action before abuse is reported.”
He added that Twitter aims to become “more conversational” and has launched a prototype for a new app called “twttr,” with the goal of “making conversation on Twitter feel faster, more fluid and more fun.”