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OPEC sees global oil supply as robust

19 September 2018

While analysts and market participants are estimating how much Iranian crude oil will come off the market with the USA sanctions, signs have started to emerge that Iran's refined oil products and condensate flows are also being disrupted, according to an S&P Global Platts analysis, citing trade and market sources and trade flow data.

Benchmark Brent crude oil LCOc1 was up 50 cents at $77.87 a barrel.

The Paris-based energy agency said falling output in Iran and Venezuela could drive up prices if it is not offset by more production elsewhere.

Last month, in its August STEO, the EIA predicted that ethanol production would average 1.04 million barrels per day in both 2018 and 2019.

The Economic Times (ET), an Indian daily said Iran now exports about 2 million barrels a day which is already 28% less than what they used to export in April.

"Crude oil production in OPEC rose month-on-month by 278,000 barrels a day in August, to 32.57 million bpd in August", the oil cartel said.

Oil has risen above $80 a barrel to its highest level this year amid concerns about supplies from Iran and a fall in USA stockpiles.

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Opec and its allies will meet in Algiers this month to assess global oil markets after having agreed to increase output at their last meeting in June.

Much of the increase in production is coming from OPEC and the United States, according to IEA, which advises oil-consuming nations.

"Today's crude stock draw of 5.3 million barrels fell far short of the (American Petroleum Institute's) decline but was significantly larger than the normal draw of around 1 million barrels for this particular week", Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.

World oil demand growth, in 2019 is forecasted to rise by 1.42 million barrels a day, down by 20,000 barrels a day from OPEC's previous report, primarily due to a less optimistic outlook for parts of Latin America and the Middle East.

How prices develop will also depend on demand.

"According to Bloomberg, in case the Iran sanctions come into place, oil price could go up to $150 a barrel", reported ET.

US crude oil production fell by 100,000 bpd to 10.9 million bpd as the industry faces pipeline capacity constraints. Brent has climbed for four straight sessions, gaining 2.2 percent the previous day. "The situation in Venezuela could deteriorate even faster, strife could return to Libya and the 53 days to November 4 will reveal more decisions taken by countries and companies with respect to Iranian oil purchases", the IEA said, referring to the day USA sanctions on Iran take effect.

OPEC sees global oil supply as robust