Crude oil higher as weather and Iranian supply in focus

India and China’s combined purchases of Iran oil will decline to almost 1 million barrels a day from about 1.3 million because of the US sanctions

India and China’s combined purchases of Iran oil will decline to almost 1 million barrels a day from about 1.3 million because of the US sanctions

Benchmark Brent crude, which traded on Monday, was up 80 cents at $78.95 a barrel, having earlier reached a high of $79.72, its strongest since May.

Money managers raised bets on rising Brent crude prices by the most since 2016 after three weeks of cutting wagers.

India is allowing state refiners to import Iranian oil with Tehran arranging tankers and insurance after firms including the country's top hipper Shipping Corp of India (SCI) halted voyages to Iran due to USA sanctions, reports said.

An emerging pattern shows that the United States sanctions are succeeding in throttling Iran's sales to its customers even before the measures take effect in early November.

Pair Iran with a booming USA economy and soaring driver demand for gasoline, and Kilduff contended that Wall Street is coming up with a bullish scenario for crude that it hasn't had in years.

The risk of declining Chinese demand for oil is worrying Middle East officials more than Iran's supply curbs as a result of US sanctions.

Oil prices have stabilized over the last two years largely thanks to a deal between OPEC and non-OPEC oil producers, including Bahrain and Oman, to curb oil output.

International Brent crude oil futures were at $77.67 per barrel at 0651 GMT, up 3 cents from their last close.

Rouhani also said Iran is to move its main oil export terminal from the Gulf to the Oman Sea, sparing its tankers from using the strategic Strait of Hormuz.

"All of Iran's oil customers are affected by increasing USA pressure to halt purchases, even as they request for concessions to cope with the consequences", said Den Syahril, a senior analyst at industry consultant FGE.

The economists said: "The EU, Korea, Japan and UAE collectively accounted for 41 percent of the average 2.6million barrels per day Iran exported in the first half of 2018".

But global oil markets are still fairly well supplied. With investors anticipating less supply from Iran due to upcoming US sanctions, and Libya and Venezuela producing far-less than expected, the markets remain vulnerable to unexpected supply disruptions.

OPEC and other allies had in June agreed to increase combined output by one million barrels a day to meet consumer demand and prevent a sharp rise in prices.

In August, Russia produced 11.21 million barrels of oil per day according to data mailed by Russian energy ministry to Bloomberg.

"Fears of Turkey's currency crisis spreading to other emerging markets have prompted demand-side concerns", said Abhishek Kumar, senior energy analyst at Interfax Energy.

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