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By Amanda Cooper
LONDON (Reuters) – Oil surpassed the $ 80 mark a barrel on Monday, raised by concerns over the worsening diplomatic crisis between Saudi Arabia and the West. just two weeks before the US sanctions come to smother the supplies of Iranian crude.
Saudi Energy Minister Khalid al-Falih told the Russian news agency TASS that his country did not intend to lift a 1973 oil embargo against consumers. Western.
Several US lawmakers have suggested imposing sanctions on Saudi Arabia for the murder of Saudi journalist Jamal Khashoggi, while the kingdom, the world's largest oil exporter, has pledged to take more severe measures as a sanction.
Falih said Saudi Arabia would soon increase production to 10 million barrels a day, up from 11.7 million barrels a day. He added that Riyadh had the capacity to increase production to 12 million bpd and that an OPEC ally of the Gulf, the United Arab Emirates, could add another 200,000 bpd.
The Brent crude futures contract (LCoC1) rose 45 cents to $ 80.23 a barrel at 9 am GMT, while the US futures (CLc1) rose 31 cents to 69.43 dollars a barrel .
"Politics is entering the scene and it may be what the Saudis will do, but in terms of supply / demand balance next year, it is not justified. for them to increase production, "said PVM Oil Associates' strategist, Tamas Varga.
US sanctions against the Iranian oil sector begin Nov. 4 and analysts estimate that supply could be 1.5 million bpd less.
"The big unknown is the amount of Iranian oil that will be out of market and we'll know it in about a month, and then we'll have a better idea of what we can expect for the first quarter of next year." said Varga.
OPEC agreed in June to strengthen supply to offset the expected disruption of Iranian exports.
An internal document considered by Reuters, however, suggests that OPEC is struggling to add barrels, as the increase in Saudi supply is offset by declines elsewhere.
Although Saudi Arabia intends to offset the barrel losses, demand prospects for next year are deteriorating.
The ongoing trade dispute between China and the United States will almost certainly erode demand, analysts say.
OPEC itself estimates that demand for its crude oil will fall to 31.8 million bpd on average next year, compared to 32.8 million bpd on average this year. [OPEC/O]
"The total impact of the US-China trade war will affect the markets in 2019 and could be a significant drag on demand for oil next year, increasing the possibility of the market becoming surplus," the statement said. Emirates NBD bank in a note.
(Graph: number of American oil rigs – https://tmsnrt.rs/2OGtHZe)
(Additional report by Henning Gloystein in SINGAPORE, edited by David Evans)
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