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LONDON (Reuters) – Oil prices stabilized on Friday as US sanctions on Tehran weighed on Iran's crude exports, tightening supply as other major exporters boosted production.
FILE PHOTO: A tankjack is seen on the Shengli oil field, operated by Sinopec, in Dongying, Shandong Province, China, on January 12, 2017. REUTERS / Chen Aizhu / File Photo
The global benchmark crude oil Brent LCoC1 was up 20 cents to 81.92 dollars a barrel by 8:20 am GMT this morning. The contract reached its highest level in four years at $ 82.55 this week, but remained relatively stable in the third quarter, gaining about 3% since the end of June.
US light crude CLc1 was 20 cents higher at $ 72.32 a barrel. It is up about 3.5% this month, but down 2.6% since the end of June.
"The declines remain well supported as Iranian sanctions continue to support the sentiment," said Stephen Innes, OANDA's director of APAC trading, adding that "the likely loss of the Iranian bid could be the dominant theme of the market.
US sanctions against Iran, the third largest producer of the Organization of Petroleum Exporting Countries, come into effect on November 4, while Washington calls on Iranian oil buyers to cut their imports to zero to force Tehran to negotiate a new nuclear agreement its influence in the Middle East.
According to other analysts, other OPEC countries have increased their output in recent months, but global stocks have declined.
Saudi Arabia is expected to add oil to the market in the coming months to offset the decline in Iranian production.
Two sources close to the OPEC policy told Reuters that Saudi Arabia and other producers had discussed a possible increase in production of about 500,000 barrels per day (bpd) among OPEC producers and non-OPEC countries.
However, ANZ said in a note on Friday that major suppliers were not able to compensate for losses due to sanctions estimated at 1.5 million barrels per day.
At its peak in 2018 in May, Iran exported 2.71 million b / d, nearly 3% of daily crude oil consumption.
In 2019, Saudi Arabia is concerned about rising shale production in the United States, especially if a stronger dollar and weaker emerging economies reduce global oil demand.
OPEC predicts that its non-OPEC competitors led by the United States will increase their production by 2.4 million bpd in 2019, while world oil demand is expected to increase by only 1.5 million bpd.
US crude output reached a record 11.1 million bpd last week, according to estimates by the US Energy Information Administration.
Report by Christopher Johnson to LONDON and Meng Meng and Aizhu Chen to BEIJING; Editing by Dale Hudson
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