Oil climbs as US drilling continues, Iranian sanctions sting

NEW YORK (Reuters) – Oil prices climbed on Monday as US drilling growth slowed and investors anticipated a drop in supply as new US sanctions against Iranian crude exports opened November.

"The low number of rigs has allowed us to progress," said Phil Flynn, an analyst at Price Futures Group in Chicago. "In the end, there are also storms that could impact stocks for a while."

Brent crude jumped 90 cents to 77.73 dollars a barrel at 10:30 am EDT (1430 GMT). The US light crude was 67 cents higher at $ 68.42 a barrel.

US drillers cut two oil platforms last week, bringing the total to 860, Baker Hughes said Friday.

The growth in the number of oil drilling rigs in the United States has stagnated since May, due to increased well productivity, but also bottlenecks and infrastructure constraints.

US stocks fell from Tuesday to Friday, traders said, citing data from the information service Genscape. Falling inventories could support prices.

"A scenario of rising oil prices is based on the decline in Iranian exports because of US sanctions, the growth of American shale production, the instability of production in countries like Libya and Venezuela, and commercial war the next 6 to 9 months, "said Harry Tchilinguirian, oil strategist at the French bank BNP Paribas.

"We are seeing Brent trading over $ 80 in this scenario," he told the Reuters Global Oil Forum.

Outside the United States, Iran's crude oil exports decline before the November deadline for the implementation of the new US sanctions.

Although many Iranian oil importers have said they oppose sanctions, few seem to be willing to challenge Washington.

"Governments can talk harshly," said energy consulting firm FGE.

"They can say that they will resist Trump and / or lobby for derogations. But in general, the companies we're talking about … say they will not take it, said FGE. "US financial penalties and the loss of shipping insurance scare everyone.

While Washington is pressuring countries to reduce their imports from Iran, it is also urging other producers to raise production prices.

US Secretary of Energy Rick Perry will meet with his counterparts from Saudi Arabia and Russia respectively on Monday and Thursday, while the Trump administration is encouraging the world's largest producers and exporters to maintain production.

Investors worry about the impact of the oil dispute between the United States and other major economies on oil demand, as well as the weakness of emerging markets.

"Trade wars, and especially rising interest rates, can create difficulties for emerging markets that drive growth in oil demand," FGE said.

Despite this, the consulting firm estimated that the likelihood of a decline in oil prices was relatively low, as the Organization of the Petroleum Exporting Countries would likely adjust production to stabilize prices.