Daily Archives: Sep 10, 2018

    FILE PHOTO: A view of Equinor's oil platform in Johan Sverdrup oilfield in the North Sea, Norway August 22, 2018. REUTERS/Nerijus Adomaitis/File Photo

    NEW YORK (Reuters) – Oil prices rose about $1 a barrel on Tuesday as U.S. sanctions squeezed Iranian crude exports, tightening global supply despite efforts by Washington to get other producers to increase output.

    Brent crude futures LCOc1 rose $1.13 to $78.50 a barrel, a 1.5 percent gain, by 10:48 a.m. EDT (1448 GMT).

    U.S. West Texas Intermediate (WTI) crude CLc1 gained $1.10, or 1.6 percent, at $68.64 a barrel.

    WTI’s discount to Brent CL-LCO1=R widened to as much as $10.38 a barrel, its deepest since June 20.

    “Widening Brent-WTI differentials in association with a strengthening Brent curve and expanding NYMEX crack spreads continue to keep us in a cautious bullish frame of mind,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.

    “Nearby Brent has been gaining independently during the past month as Iranian exports have begun to decline significantly well ahead of the official beginning of sanctions,” Ritterbusch added.

    Washington has told its allies to reduce imports of Iranian oil and several Asian buyers, including South Korea, Japan and India appear to be falling in line.

    But the U.S. government does not want to push up oil prices, which could depress economic activity or even trigger a slowdown in global growth.

    U.S. Energy Secretary Rick Perry met Saudi Energy Minister Khalid al-Falih on Monday in Washington, as the Trump administration encourages big oil-producing countries to keep output high. Perry will meet with Russian Energy Minister Alexander Novak on Thursday in Moscow.

    Russia, the United States and Saudi Arabia are the world’s three biggest oil producers by far, meeting around a third of the world’s almost 100 million barrels per day (bpd) of daily crude consumption.

    Russian Energy Minister Alexander Novak said on Tuesday that Russia and a group of producers around the Middle East which dominate the Organization of the Petroleum Exporting Countries may sign a new long-term cooperation deal at the beginning of December, the TASS news agency reported. Novak did not provide details.

    A group of OPEC and non-OPEC producers have been voluntarily withholding supplies since January 2017 to tighten markets, but with crude prices up by more than 40 percent since then and markets significantly tighter, there has been pressure on producers to raise output.

    U.S. crude inventories were forecast to have fallen for a fourth consecutive week last week, according analysts polled ahead of reports from industry group the American Petroleum Institute (API) at 4:30 p.m. EDT (2030 GMT) and the U.S. Department of Energy on Wednesday.

    Also supporting prices was an attack on the headquarters of Libya’s National Oil Corporation (NOC) in the capital Tripoli on Monday.

    The NOC has continued to function relatively normally amid chaos in Libya. Oil production has been hit by attacks on oil facilities and blockades, though last year it partially recovered to around one million barrels per day.

    As Middle East markets tighten, Asian buyers are seeking alternative supplies, with South Korean and Japanese imports of U.S. crude hitting a record in September.

    U.S. oil producers are seeking new buyers for crude they used to sell to China before orders slowed because of the trade disputes between Washington and Beijing.

    This is one reason that the discount for U.S. crude versus Brent has widened, traders said.

      NEW YORK (Reuters) – The U.S. dollar edged up against a basket of major currencies on Tuesday as concerns about trade friction between China and the United States prompted some safe-haven buying of the currency.

      China will ask the World Trade Organization (WTO) next week for permission to impose sanctions on the United States, for Washington’s non-compliance with a ruling in a dispute over U.S. dumping duties.

      Anxiety over the trade dispute between the world’s two biggest economies outweighed traders’ optimism about a possible agreement on the terms of Britain’s exit from the European Union and reversed some of euro and sterling’s gains on Monday.

      The Australian dollar was another casualty of the trade tension between Beijing and Washington, tumbling to its weakest level against the greenback since February 2016.

      “The dollar index is in positive territory this morning with the Aussie caught in the crossfire of trade spat between the U.S. and China,” Viash Sreemuntoo, corporate trader at XE said in a research note. “Investors continue to take a cautious approach amidst trade war headlines.”

      At 10:27 a.m. (1427 GMT), the dollar index that tracks the greenback against six major currencies was up 0.06 percent at 95.210. It shed over 0.2 percent on Monday as the euro and sterling bounced after the European Union chief negotiator Michel Barnier hinted at a possible Brexit deal.

      The euro was buoyed by a decline in Italian government borrowing costs after Economy Minister Giovanni Tria on Monday predicted that yields would drop as the government lays out its eagerly awaited 2019 budget.

      The euro initially rose 0.4 percent to $1.16445 before turning lower in early U.S. trading. It later pared those losses to be little changed on the day at $1.15940 following a German magazine Der Spiegel report that said the executives of Deutsche Bank and Commerzbank were growing more open to the idea of a merger.

      Sterling touched a five-week high against the dollar earlier Tuesday before fading to $1.2989, down 0.3 percent on the day, according to Reuters data.

      The Australian dollar was down 0.26 percent to $0.70940 after hitting its lowest since February 2016 on concerns that potential damage to the Chinese economy from a trade war would hurt Australia’s exporters.

      The New Zealand dollar also hovered near a 2-1/2 year low at $0.6505. China’s offshore yuan fell 0.2 percent to 6.8673, a 2-1/2 week low.

      Additional reporting by Tommy Wilkes in LONDON; Editing by Bernadette Baum

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