OPEC cuts oil demand estimate in 2019

OPEC cuts oil demand estimate in 2019

OPEC cuts oil demand estimate in 2019

While talking to media persons in New Delhi, Pradhan said it is yet not clear that if India will be granted a waiver from USA sanctions on Islamic Republic (Iran). The US has asked buyers of Iranian oil to cut imports to zero starting in November. Late last week, the United States hinted that it was at least considering waivers.

Oil prices fell to two-week lows on Thursday as they extended big losses from the previous session amid a rout in global stock markets, with oil also taking a hit from an industry report showing USA crude inventories rose more than expected.

Should OPEC keep pumping at September's rate, the report points to an excess supply of nearly 1 million bpd in 2019 - although this is before any sizeable reduction takes place in Iranian output.

Reports emerged in early September that India had given permission to state-owned refiners to import oil from Iran on Iranian tankers using Iranian-backed insurance, after the biggest Indian shipping company backed out of Iran voyages due to the US sanctions.

Goldman Sachs reckons US shale oil production can continue to increase by 1 million bpd every year until 2021 at the earliest, according to a new report by the investment bank. While the rally has eased, traders continue to speculate whether the cartel and its allied producers can offset dwindling supplies from Iran to Venezuela.

"The U.S. government's tough stance raised the stakes for a more significant Iran export loss than previously foreseen", said Norbert Ruecker, head of macro and commodity research at Swiss bank Julius Baer.

Crude had surged to a four-year high earlier this month with impending American sanctions against Iran set to curtail exports from the OPEC's third-largest producer.

"I think the sanctions will be very tough", Beard said.

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Energy hungry India now imports more than 82 percent of crude oil for its domestic requirement and about 62 percent of its (Indian) oil imports come from Saudi Arabia and other middle eastern countries like Iran, Iraq and Kuwait.

Other ports further west were still operating normally. Year to date, OPEC's reference basket is up $20.21 (40%) per barrel compared to the first nine months of 2017. India is Iran's top oil client after China.

The decline in prices may impact Ghana in two ways; that the country will receive less for the exports of crude during the period which will affect projected oil revenue.

"This is due to a weaker economic outlook, trade concerns, higher oil prices and a revision to Chinese data", said the IEA, which advises industrialised countries on energy policy. However, those sanctions on Iran were lifted in 2016. "The market remains well supplied".

Sourcing from Iran increased to 12.7 MT in 2015-16, giving it the sixth spot.

EIA estimated Brent crude oil spot prices averaged 79 dollars a barrel in September, up 6 dollars from August. However, oil market basics do not point out that this demand is apparent.

But supply concerns are keeping the market on edge.

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