ibusinesslines.com September 21, 2018

'US to become global leading producer of crude oil'

14 July 2018, 08:01 | Kelvin Horton

Crude Oil

Crude Oil

"This is a rational fear and one that could see Brent take out support at $72.50 on news of a retaliation by China".

Brent crude LCOc1 fell $5.46, or 6.9 percent, to settle at $73.40 a barrel. West Texas Intermediate, the US benchmark for the price of oil, was down 1.1 percent to $73.28 per barrel.

The selling pressure intensified as trade tensions between the US and China raised concerns about demand.

The specter of tariffs on a further $200 billion worth of Chinese goods sent commodities lower along with stock markets, as trade tensions between the world's two biggest economies intensified.

"Markets in Asia are a lot more settled today", said Greg McKenna, chief market strategist at AxiTrader in Sydney. -China trade tensions raised demand concerns.

China was the world's biggest oil importer past year, followed by the US.

Libyan Crude Oil production fell to 527,000 BPD from a high of 1.28-M BPD in February following the port closures, the NOC said earlier.

Futures edged up from a 2% decline in NY after the EIA reported Wednesday that USA crude stockpiles shrank by 12.6 MMbbl last week.

"Libyan relief changes the conversation about spare capacity", said John Kilduff, a partner at Again Capital Management.

EIA's report shows a higher oil demand in the U.S.in 2019.

The prospect of sanctions on Crude Oil exports from Iran, the world's 5th-biggest Crude Oil producer, has helped drive up Crude Oil prices in recent weeks with both Key Crude Oil contracts trading near 3.5 year highs.

It's likely that some countries will seek an exemption from sanctions on Iranian oil purchases, and the USA will consider these applications, Secretary of State Mike Pompeo said.

India is an obvious possibility-its imports and demand are surging, and it may be willing to replace at least part of its Iranian oil imports out of fear that its companies and the sovereign could lose access to the US financial system should it continue to buy Iran's oil.

"That's while Saudi Arabia told OPEC it pumped about 10.5 million barrels of crude a day last month as the kingdom sought to cap rallying prices by ramping up output, according to people familiar with the matter", writes Bloomberg.

However, there was speculation that Saudi Arabia, which has about 18 percent of the world's proven petroleum reserves, would tap into its spare capacity of 2 million barrels per day to add more oil to the markets, while U.S. shale production also remained robust.

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