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Oil prices recovered from last session losses and gained grounds on Wednesday. Benchmark Brent crude oil futures edged to $62.05 per barrel. US WTI crude futures rose to $53.74 per barrel. Traders are now waiting for President Trump to address the US State of the Union today, expecting a showdown on US-China deal.
Sources have revealed that the US Environmental Protection Agency approved a 2017 hardship waiver from US biofuel laws to Chevron Corp’s Utah refinery earlier this year. The Renewable Fuel Standard (RFS) necessitates refiners to blend biofuels into their fuel pool or instead buy compliance credits from competitors that do. Corn-belt farmers are exasperated because of the waivers which hurt the demand for ethanol and other biofuels.
Crude oil prices dropped in the international market today, amid expected rise in US stocks. Official data is due for release on Wednesday. President Trump’s comments added further to the slump. Brent crude futures were down by 1% from Monday, trading at $69.42 per barrel. NYMEX December light sweet crude contract lowered 1.37%, to $59.11/b.
Saudi Arabia has to deal with Trump’s criticism after announcing its plan to lower oil production on Monday. In a tweet, President Trump said “Hopefully, Saudi Arabia and OPEC will not be cutting oil production. Oil prices should be much lower based on supply!” Energy Minister of Saudi Arabia informed that OPEC and its allies will now reverse half the increase in oil output that was planned initially this year.
A new wave of US sanctions hit Iran’s core parts of the economy yesterday. The US is said to have imposed its "toughest ever" sanctions against the Persian country. The US administration re-imposed sanctions this year after President Trump pulled out of the accord signed in 2015. The Nov 4 wave will target more than 700 individuals, entities, vessels and aircraft.
The Trump administration slammed a series of sanctions on Iran yesterday, in the light of US pulling out of the 2015 Iran nuclear deal. Tough economic sanctions were re-imposed on the Hassan Rouhani-led Islamic regime. The sanctions, which take effect today, forbid usage of USD by Iran in any kind of transactions. Iran will no longer have access to buy US and European aircraft.
The American Petroleum Institute (API) has shown disappointment from US administration denial to exclude imported steel to be used in certain parts of oil and gas industry, from Section 232 tariffs. API VP believes that the process which decided whether to grant exclusion or not lacks transparency. The association has said that the decision is misguided and will impact American energy production and jobs.
OPEC President has reverted on Trump’s tweet stating that OPEC is doing their best to increase oil supply, but they won’t overdo it. Reportedly, UAE increased its production by almost half a million barrel and Russia by a million barrels daily in their bid to reduce prices. Saudi Arabia is finding it difficult to bring 2 million bpd supply back online, lost due to US sanctions on Iran.
While Trump has blamed OPEC for the rising crude oil prices, Iran, on the other hand, has speculated that oil prices will reach $100 per barrel because of US sanctions on Iran. Iran’s OPEC Governor addressed Trump’s actions and commented that efforts of Saudi Arabia and Russia to help U.S in bringing down the oil prices are in vain
It’s a rare sight, an OPEC producer accusing the U.S. of driving up oil prices. But that’s exactly what Iran Oil Minister Bijan Namdar Zanganeh said on state television Thursday. He went on to say that President Trump is engaging in “shenanigans” in the oil market -- and that he’s cut a deal with some members of the OPEC to keep production down and prices high.
Following President Trump’s decision to abandon the international nuclear deal with Iran, Khalid Al Falih, Saudi Arabia’s Minister of Energy, Industry and Mineral Resources has stated that the kingdom is prepared to step in and help stabilise the global oil supply market. The statement came out promising at the backdrop of market analysts’ prediction that Iran’s output could drop by around 500,000 barrels per day (bpd) within six months.
The U.S. President has opened up an uncertain new chapter for the Middle East by saying that the U.S. will withdraw from the watershed 2015 accord to curb Iran’s nuclear program and re-institute financial sanctions on the Islamic Republic. Trump’s political opponents have warned that he could lead the U.S. into another Mideast war.
As reported by Reuters, the price of West Texas Intermediate (WTI) crude rose above $70 a barrel on Monday for the first time since late 2014. Analysts have suggested the continued collapse of the Venezuelan oil industry as the prime reason for the lift in prices and another being the possible re-imposition of sanctions on Iran.
Iran’s crude exporters recorded a rocket spike in shipments in April, 2.62 MMbpd in total, before the possible re-imposition of U.S. sanctions on their oil sales.The U.S. President will decide by May 12 whether to keep America in a global agreement that restricts Iran’s nuclear activities in exchange for relief from sanctions and a restriction on oil sales.
In order to narrow down its $28 billion trade surplus, India is seeking more oil, drones and aircraft from the U.S. Government officials have said that India could bridge the surplus by $4 billion through oil imports alone. There are emerging concerns of probable collateral damage to the Indian economy from Trump’s trade friction with China.
The U.S. President criticized OPEC for pushing harder for higher oil prices. The oil cartel’s firm hold on its own production is further getting tighter even though the global oil prices have surged to almost $75 per barrel. However, OPEC has denied the accusations saying that geopolitics also play a crucial role in determining the oil prices which are beyond its control.
China has announced that it will take steps against the measures introduced by the US President. China’s Ministry of Commerce said that it would levy 25% tariffs on imports of 106 U.S. products including automobiles and aircraft. There are emerging concerns regarding the declining economic growth and fuel demand. This decision has eliminated the previous support for prices and OPEC’s output plunged to the lowest in a year in March.
With the major producers of OPEC accelerating the timeline for restraining a worldwide supply glut, oil has advanced to a three-week high. This move will bring about a balance in the global crude supplies by the end of September. Moreover, there are concerns looming that the US President might toughen sanctions against Iran. Analysts opine that the oil market is in reasonably good health at the moment.