Brent Crude Nears Two-Month High as Iran Ships Least Since 2016
Brent stalls below $78 as Iran loss seen offset by higher supply.
(Bloomberg) -- Oil rose to the highest in almost two months in London as Iranian crude exports tumble, with Asian buyers taking fewer cargoes from the Middle Eastern nation weeks before U.S. sanctions take full effect.
Brent futures gained 0.7 percent. Iran shipped just under 2.1 million barrels a day of crude and condensates in August, the least since March 2016, ship-tracking data compiled by Bloomberg show. Meanwhile, traders are scrutinizing Saudi Arabia and Russia’s output for signs they will fill potential gaps in supply. Russia kept pumping oil near post-Soviet records last month, while OPEC output rose to its highest this year.
“Underpinning the prevailing bullish sentiment is the increasingly supportive supply outlook,” PVM Oil Associates analyst Stephen Brennock wrote in a report. “Much of this owed to the downswing in Iranian oil shipments.”
Oil rebounded last month as declining shipments from Iran added to concerns over Venezuela’s plunging production, helping offset concerns that a trade war between the U.S. and China will dampen demand.
The outage of the North Sea Buzzard oil field, which is said to be shut since Aug. 31, is also likely to keep the physical oil market tight over the coming days until the maintenance ends, said Giovanni Staunovo, an analyst at UBS Group AG in Zurich. The market is also likely to closely track the path of Tropical Storm Gordon moving through the U.S. Gulf this year, though currently no disruptions are expected, he said.
Brent futures for November settlement closed 51 cents higher at $78.15 a barrel on the ICE Futures Europe exchange in London, the highest since July 10.
West Texas Intermediate for October delivery added 30 cents to $70.10 on the New York Mercantile Exchange. Trading halted just before 1 p.m. and there was no settlement Monday because of the Labor Day holiday in the U.S. Total volume traded was about 77 percent below the 100-day average.
The Brent contract traded at an $8.44 premium to WTI for the same month, the widest since June. The U.S. marker is lagging Brent as American producers pump crude at a record 11 million barrels a day.
Russia, the main beneficiary from a deal with OPEC and its allies to increase output, pumped an average of 11.21 million barrels a day, according to data from the Energy Ministry’s CDU-TEK unit.
Libya’s 310,000 barrel-a-day production increase in July led OPEC’s combined monthly output gain of 420,000 barrels a day to 32.74 million, a Bloomberg survey showed.
Here are some key oil-market figures, news and events:
- Gordon is lashing South Florida with tropical storm force winds and heavy rains. Click here to see a map of the storm’s path and to access functionality showing energy assets in its trajectory.
- The U.S. heating oil crack gained to its highest intraday level since June early Monday.
- New North Sea oil play sees bet from Centrica Plc-backed driller
--With assistance from Tsuyoshi Inajima and Alex Longley.
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