Oil rises by more than 2% as US sanctions on Iran reduce supply

NEW YORK (Reuters) – Oil prices rose more than 2 percent on Tuesday as US sanctions weighed on Iran 's crude exports, tightening the global supply despite Washington' s efforts to bring oil prices down. other producers to increase their production.

Since the spring, when the Trump Administration said it would impose sanctions on Iran, crude traders have set a risk premium reflecting supply shortages that could arise when exports from the third largest OPEC are cut off. As we approach the date of imposition of the November 4 sanctions, the premium has increased.

"The fear is that the sanctions are so effective that they allow more oil to be removed from the market than OPEC producers and non-OPEC producers," said Andrew Lipow, President of Lipow Oil Associates in Houston.

Brent LCoC1 crude forward prices increased from $ 1.67 to $ 79.04 per barrel, a 2.2% gain, at 1:10 pm EDT (1710 GMT).

US West Texas Intermediate (WTI) CLc1 futures contracts gained $ 1.95, or 2.9%, at $ 69.49 per barrel.

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.

On Tuesday, the US Energy Information Administration reduced its 2018 global oil demand growth forecast from 80,000 barrels per day to 1.58 billion bpd.

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.