Oil Prices Inch Lower On Trade Worries


The Energy Information Administration on Wednesday reported that US crude inventories fell 4 million barrels last week, a far cry from a Reuters poll predicting a 1.2 million barrel build; as a result, Brent rose 49 cents to settle at $70.37 per barrel, while West Texas Intermediate settled up 72 cents at $62.12.

On an annual basis, 200,000 bpd of oil equals about 10 million tonne (mt) of oil per year. Rising crude oil inventories in the USA also helped: this week is the first with a draw after two consecutive weekly builds, both considerable.

Aramco's offer to Indian oil companies is for deliveries starting June. The increase came as a result of buyers rushing in shipments before the USA sanctions waiver deadline of early May. On Monday, May 6, US Secretary of Commerce Wilbur Ross said that his country can not ensure sale of oil to India at cheaper rates to compensate for Iranian oil.

Iran has mobilized all its resources to sell oil in a "grey market", bypassing us sanctions that Tehran sees as illegitimate, state media quoted Deputy Oil Minister Amir Hossein Zamaninia as saying on Sunday. In fact, refiners would face a heftier bill on Arab light crude.

Rouhani's comments, carried live on Iranian TV, came a day after Washington acted to force Iran to stop producing low-enriched uranium and expanding its only nuclear power plant, intensifying a campaign aimed at halting its ballistic missile programme and curbing its regional power.

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The United States has decided not to renew exemptions from sanctions against Iran granted a year ago to buyers of Iranian oil, taking a tougher line than expected.

Oil prices have had some support from signs of tighter global supply on the back of production cuts by the Organisation of the Petroleum Exporting Countries (OPEC) and allies including Russian Federation.

The data was actually mixed with the decline in gasoline and distillates offsetting the unexpected build in crude oil. This helped Iraq to become the top oil exporter to India. In 2018, Saudi Arabia exported 40.33 mt oil, up from 36.16 mt oil sold in the previous year.

Adding to global anxiety, the Trump administration is deploying a carrier strike group and bombers to the Middle East in response to troubling "indications and warnings" from Iran, widening the rift between the two countries.