Iran confirms S. Korea's halt of oil imports

Iran confirms S. Korea's halt of oil imports

OPEC, Russia and other countries ignored USA calls to increase crude oil production, sparking a Monday rally that saw Brent futures soar past the $80 mark.

The Middle East dominated Organization of the Petroleum Exporting Countries (OPEC), of which Iran is a member, as well as top producer Russian Federation, are discussing raising output by 500,000 bpd to counter falling supply from Iran, although the discussions are not finalised.

Oil prices could rise towards $100 per barrel towards the end of the year or by early 2019 as sanctions against Iran bite, commodity merchants Trafigura and Mercuria said on Monday at the Asia Pacific Petroleum Conference (APPEC) in Singapore.

Trump has been calling publicly for OPEC to help lower prices by producing more.

In response to Trump's remarks, Saudi Arabia's oil minister Khalid al Falih told CNBC: "That is of course not true, we have been looking at more important aspects which is adequacy of supply". The last time prices were sustained at that level was 2014.

With markets showing signs of further tightening ahead of impending new Iran sanctions, traders and analysts are predicting that oil could scale above $90 per barrel. WTI crude, the benchmark North American contract, was up 1.7 per cent at $72 USA a barrel.

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USA light crude CLc1 was 1.25 dollars higher at 72.03 dollars.

In addition to USA sanctions cutting Iranian supply, the world is also dealing with a decline in Venezuelan oil production due to an economic crisis in the Latin American nation, according to Trafigura's Luckock. Yet the cartel and its allies gave mixed signals at a meeting in Algiers on Sunday, ultimately showing little sign they would heed US demands to rapidly push down crude prices.

Iran itself faces the prospect of much lower oil exports and output in coming months due to fresh USA sanctions.

Iran told OPEC its production had been steady in August at 3.8 million barrels per day. While the group didn't take action on Sunday, it seems set on making sure the market doesn't get too carried away, said Mark Quartermain, Royal Dutch Shell Plc's vice president for global crude oil trading and supply. However, Saudi Arabia and Russian Federation now say they have no more capacity.

Oil markets opened strongly on Tuesday, with Brent crude remaining near a four-year reached the previous session.

"The market's still being driven by concerns about Iranian and Venezuelan supply", said Gene McGillian, director of market research at Tradition Energy in Stamford.

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