Oil rises after the imposition of sanctions on Iran, but the US-China trade war puts an end to the gains

SINGAPORE (Reuters) – Oil prices rose on Monday, as markets tighten after US sanctions against Iranian crude exports next month.

Brent crude futures at the beginning of the month, LCOc1, were at $ 79.96 per barrel at 4:14 GMT, 18 cents higher than their last closing price.

The West West Intermediate (WTI) US CLC1 futures price was $ 69.32 per barrel, 20 cents higher than their latest settlement.

US sanctions against Iran's oil sector, the third largest producer of the Organization of the Petroleum Exporting Countries (OPEC), is expected to begin on Nov. 4. The United States, under the chairmanship of Donald Trump, is trying to reduce Iran's zero oil exports to force the country to renegotiate an agreement on its nuclear program.

US Treasury Secretary Steven Mnuchin told Reuters on Sunday that it would be harder for countries to obtain sanctions waivers than in the previous Obama administration, when several countries, particularly in Asia, have received them.

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.

Fatih Birol, executive director of the International Energy Agency (IEA), said Monday that other producers may have trouble compensating for the expected break-up in Iran and that oil prices could rise further.

Traders said that oil consumers were stockpiling for new disturbances.

"In China, seasonal demand is up and stocks are suspected. Similarly, the United States and the OECD continue to build stocks in anticipation of supply disruptions this winter, "said Stephen Innes, head of trade for the Asia-Pacific region at Oanda in Singapore.

Despite this, Mr. Innes said that the overall supply of oil is currently sufficient to meet demand.

US drillers have added four oil rigs in the week to October 19, bringing the total to 873, Energy Services firm Baker Hughes said Friday, bringing the number of platforms to the highest level since March 2015 RIG-OL-USA-BHI

The number of US rigs is an early indicator of future production. With activity picking up after months of stagnation, US crude output should also continue to rise.

Intercontinental Exchange (reflecting changes in US oil flows resulting from increased production and increased exports)ICE.N) announced that its new futures contract on futures at the Permian West Texas Intermediate in Houston, Texas, would begin trading on Monday.

Besides the potential for increased oil supply, the ongoing Sino-US trade dispute should begin to weigh heavily on demand.

"The total impact of the US-China trade war will affect the markets in 2019 and could weigh heavily on oil demand next year, increasing the possibility of the market becoming redundant," Emirates Bank NBD said in a statement. note.

The Eastport broker said that "Chinese manufacturing was starting to slow down" and that "Trump's proposal to slap … tariffs on … additional Chinese products as of January 1st would be an additional drag on trade ".

(Chart: number of US platforms at the highest since 2015 – tmsnrt.rs/2PfF6i3)