Saudi Arabia and US sanctions against Iranian crude exports are concentrated

Oil prices eased on Tuesday after Saudi Arabia pledged to play a "responsible role" in energy markets, although there is concern over the prospect of US sanctions against exports of energy. Iranian crude oil starting next month.

Brent crude futures in the first month were $ 79.62 per barrel at 4:27 am GMT, down 21 cents (0.3%) from their last close.

The WTI futures price (West Texas Intermediate) was $ 69.26 per barrel, down 10 cents from their latest settlement.

US sanctions against Iranian oil exports are due to start on November 4th.

As the largest crude oil exporter, Saudi Arabia has pledged to maintain market supplies despite its growing isolation from the killing of Saudi journalist Jamal Khashoggi.

At a time when US sanctions against Iran were tight, Saudi Arabia could reduce its supply of crude in retaliation for possible sanctions against him following the murder of Khashoggi.

Saudi Energy Minister Khalid al-Falih said Monday that he "had no intention," and that Saudi Arabia would play a "constructive and responsible role" on global energy markets.

Peter Kiernan, senior energy analyst at the Singapore Economist Intelligence Unit, said a Saudi reduction would be counterproductive as "Saudi Arabia risks losing market share. to the benefit of other exporters, while losing its reputation as a stable player in the market. "

Despite this, Sukrit Vijayakar, director of the Trifecta Energy Council, said that "the markets are tired of the consequences of US sanctions on the Iranian oil sector," "estimating that the sanctions" could have an impact on 1.5 million barrels per day of supply. "

JP Morgan has raised its Brest price forecast for 2019 from $ 20.50 a barrel to $ 83.50, saying "this bullish argument is strongly motivated by the tightening of supply as a result of sanctions imposed by the Iran and by reducing the unused production capacity ".

Everyone is not so optimistic. The Eastport broker said crude prices "are expected to fall over the next few months, as rising US output offsets rising global demand."

Crude oil production in the United States has risen by almost one-third since mid-2016 to about 11 million barrels a day, and increased drilling activity augurs further increases.

Reflecting a cautious outlook, traders have limited their exposure to oil markets by removing long positions on crude, as fund managers have reduced their combined positions by 187 million barrels in total over the last three weeks, according to stock data. and regulatory.