Oil slides after China announces tariff on United States crude

Prepare for $90 oil after sanctions against Iran take effect – analyst

Prepare for $90 oil after sanctions against Iran take effect – analyst

Brent Oil Futures for October delivery rose 0.33% to $74 per barrel at 1:02AM ET (05:02 GMT), while Crude Oil WTI Futures for September delivery also went up by 0.12% to $69.09 a barrel, Investing.com reported. Last week's U.S. EIA crude oil inventories jumped significantly, putting downward pressure on oil prices before finding some support in the latter half of the week. However, lingering concerns over the sanctions on Iran and falling US inventories should be supportive over the near-term.

"This "Big 3" coordinated oil market management in response to a move out of the $70-80/b Brent range does provide some gravitational pull for prices to move back into this range, as was demonstrated last month by the Saudi announcement that it was prepared to adjust exports to meet rapidly changing market condition".

Net U.S. crude imports fell last week by 358,000 barrels per day.

"It's certainly going to impact on movement between the USA and China, making it less efficient, meaning pressure on prices here", said Andrew Lipow, president of Lipow Oil Associates.

Jameel Ahmad, global head of currency strategy and market research at FXTM, said the escalation "is just reminding investors that their trade war concerns are going nowhere anytime soon".

Iran ranks as the third largest oil producer among its peers in the Organization of Petroleum Exporting countries, or OPEC, having shipped out almost 3 million barrels per day of crude in September.

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USA crude stocks fell last week, while gasoline and distillate inventories rose, the Energy Information Administration said on Wednesday.

Oil price rose today amid reports that the US restored sanctions against Iran, the world's fifth-largest oil producer.

Analysts estimated that Iranian production would drop further amid the restored sanctions and drive the oil price further up. If more oil leaves the market than expected then the bulls will win the supply/demand battle. The sanctions, which would come into force from November 4, are likely to block current payment routes used to pay for Iranian imports.

Europe is an important outlet for the OPEC member, and the region was taking around 600,000-700,000 b/d, or a third, of Iranian crude exports until May this year. "We are going to work with individual countries on a case-by-case basis, but our goal is to reduce the amount of revenue and hard currency going into Iran", a senior USA administration official said on Monday.

Gasoline stocks rose by 2.9 million barrels, compared with expectations for a drop of 1.7 million-barrel drop, as forecast in a Reuters poll.

As recently as June, China was the top foreign buyer of U.S. crude, importing a record 15 million barrels that month. "We had been regularly taking spot cargoes but are now also looking at tender-term deals where monthly cargoes can be booked through a tender purchase", he said.

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