Iran offers discount oil to Asia | Economy

Iran offers discount oil to Asia | Economy

Libya has partially restored production, and Saudi Arabia and Russian Federation have added new supply.

OPEC countries have increased oil production by 40,700 barrels per day, to 32.32 million barrels in July 2018 thanks to the contributions of such countries as Kuwait, Nigeria, UAE and Iraq, the OPEC's August report said.

Analysts polled by S&P Global Platts Monday were looking for USA crude inventories to have declined by 1.7 million barrels for the week ending August 10, with refinery runs remaining high on healthy margins and strong export demand.

"If 1 million bpd or more of Iranian exports go AWOL, the current fragile supply-demand balance will be upended, potentially sending oil prices above the May peak".

Although Brent crude oil has become about 8 percent more expensive this year in dollars, the price increase has been 14 percent in China's renminbi and more than 18 percent in Indian rupees.

At the same time, in the US, the Energy Information Administration sees output at major shale plays rising to 7.52 million barrels a day in September.

Distillate inventories added 3.6 million barrels last week, after a build of 1.2 million barrels in the prior week, with production averaging 5.3 million bpd, up by 100,000 bpd on the previous week. "They're about 21 million barrels compared to numbers that are closer to 55 or 65 million barrels in the last couple of years, so you could have a squeeze between now and when the September WTI contract expires".

The API also reported a draw in gasoline inventories last week in the amount of 1.56 million barrels.

Crude oil storage tanks are seen from above at the Cushing oil hub, in Cushing, Oklahoma, March 24, 2016. This is expected to be for delivery between November to January and the company is planning to look for the replacement of thee Iranian crude oil. But the trade war could undercut that scenario.

On Friday, the International Energy Agency (IEA) warned the energy market outlook could become "far less calm" as USA -imposed oil sanctions against Iran take effect.

In the latest round of levies, China said it would impose additional tariffs of 25 per cent on $16 billion worth of USA imports.

Northwest European refining margins are strong, and USA crudes are competitive.

In refined products, analysts polled by Platts were looking for USA gasoline inventories to have declined by 1.0 million barrels the week ending August 10, and distillate inventories to have risen by 250,000 barrels as United States economic growth supports higher demand for refined products.

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