Oil rises by $ 1 a barrel while US sanctions on Iran reduce supply

NEW YORK (Reuters) – Oil prices climbed by about a dollar a barrel on Tuesday as US sanctions weighed on Iranian crude exports, tightening global supply despite Washington's efforts to bring in other producers to increase their production.

Brent LCOc1 futures were up $ 1.13 to $ 78.50 a barrel, a 1.5% gain, at 10:48 am EDT (1448 GMT).

US West Texas Intermediate (WTI) CLT1 crude gained $ 1.10, or 1.6%, at $ 68.64 per barrel.

The delivery of WTI to Brent CL-LCO1 = R expands to $ 10.38 per barrel, its strongest since June 20.

"The increase in Brent-WTI spreads, coupled with a strengthening of the Brent curve and spread widening of the NYMEX, continues to keep us in a cautious mood," said Jim Ritterbusch, president of the firm. Ritterbusch and Associates.

"Neighboring Brent has won independently over the past month, as Iranian exports began to drop significantly well before the official start of sanctions," Ritterbusch added.

Washington has asked its allies to cut Iranian oil imports and several Asian buyers, including South Korea, Japan and India, appear to be losing steam.

But the US government does not want to raise oil prices, which could depress economic activity or even cause a slowdown in global growth.

US Secretary of Energy Rick Perry met with Saudi Energy Minister Khalid al-Falih in Washington on Monday, while the Trump administration urges major oil producing countries to maintain high production. Perry will meet Russian Energy Minister Alexander Novak in Moscow on Thursday.

Russia, the United States and Saudi Arabia are by far the three largest oil producers in the world, with about one-third of the roughly 100 million barrels a day of daily crude oil consumption.

Russian Energy Minister Alexander Novak said on Tuesday that Russia and a group of Middle Eastern producers who dominate the Organization of Petroleum Exporting Countries could sign a new long-term cooperation agreement , reported the TASS news agency. Novak did not provide details.

A group of OPEC and non-OPEC producers have voluntarily suspended supplies since January 2017 to tighten markets, but crude prices have risen by more than 40% and markets have tightened.

US crude inventories are expected to fall for the fourth consecutive week last week, analysts surveyed before the reports of the American Petroleum Institute (API) industrial group at 16:30. EDT (8:30 pm GMT) and the US Department of Energy on Wednesday.

The attack on the headquarters of the Libyan National Oil Corporation (NOC) in Tripoli, the capital, was also supported.

The NOC continued to operate relatively normally in the chaos in Libya. Oil production was hit by attacks on oil facilities and dams, although last year it partially recovered to about one million barrels a day.

As markets in the Middle East tighten, Asian buyers are looking for alternative sources, with South Korean and Japanese imports of US crude reaching a record high in September.

US oil producers are looking for new buyers for the crude they were selling to China before orders slow down because of trade disputes between Washington and Beijing.

This is one of the reasons why the discount on US crude compared to Brent has widened, according to traders.