Many oil companies say that demand for their products will be more durable. The question is what happens next? As a result, Sen said, oil prices jumping into the $90s is a real possibility within the next few months.
Oil prices broke the $80 a barrel barrier yesterday as the storm, along with Donald Trump's sanctions on Iran, bumped prices. But the rally was kneecapped by a variety of factors, and it could be challenging to break above those key pricing thresholds in the near future. When that happens, oil prices will readjust higher and could hit $100. Currency problems continue to dog a long list of emerging market economies, pushing a few into, or to the brink of, recession. "The supportive factors in this market still remain".
She said: "The hurricane story is transitory but the oil market us particularly sensitive to such events as we have a pretty tight supply situation looming".
This congestion is already causing offers to rise for US supply for loading towards the end of the year, although no fixed deals have been reported, said a third trader in Singapore. "We have tested breaking higher, but that failed, so now we have a temporary setback". However, this will limit the available market for Iranian oil.
The White House has invited Chinese officials to restart trade talks as it prepares to escalate a trade war with China with tariffs on $200 billion worth of Chinese goods. That would surely spark a response from China, and the back-and-forth retaliatory trade attacks could sap global growth.
Analysts expect such behaviour to ramp up when U.S. sanctions on Iran's oil industry return on November 5, following Washington's withdrawal from the nuclear deal in May.
"We underestimated the degree to which New Delhi and Beijing would concede to Washington's demands", it said in a briefing note. It's one data point, however, so it doesn't indicate a solid trend.
Hurricane Florence: Storm weakens slightly, still risky
On Wednesday morning, the president urged those in the path of Florence to "get out of its way". "It's called Mother Nature". CNN reports dire word from FEMA associate administrator Jeff Byard, who warns that this storm is not to be reckoned with.
State-run producer Saudi Arabian Oil Co., known as Aramco, is said to supply full contractual crude volumes to at least three buyers in Asia for October. "As for the rest of the weekly data, it was negative but also unremarkable for late August".
US light crude pushed over $70 on Wednesday due to falling USA crude inventories and production levels. In New York last night the price was $78.43, up 1 per cent so far this month.
U.S. crude inventories C-STK-T-EIA fell 5.3 million barrels in the week to September 7 to 396.2 million barrels, the lowest since February 2015 and about 3 percent below the five-year average for this time of year, the U.S. Energy Information Administration (EIA) said on Wednesday.
As per the analysts, some of the United States grades would be fit for Indian refiners, but they will have to battle commercially with crudes with shorter travel times, so U.S. oil could serve as spot purchases for Indian companies when the arbitrage works. Speculation is swirling over whether a potential supply gap can be filled by the group at a time when American crude inventories are falling to the lowest since 2015, and output losses are witnessed in Iran.
With OPEC and Russian Federation having already raised production, spare capacity in the near term is very limited, likely around 300,000 bpd, the analyst said, noting that if any sudden outage in unstable Iraq, Libya, or Nigeria were to occur, the market would tighten even further.
US nationwide crude inventories may have fallen 2.25 MMbbl last week, according to a Bloomberg survey of analysts ahead of government data due to be released on Wednesday. Just a few days ago, the CEOs of Schlumberger and Halliburton warned that drilling activity the Permian is cooling, which could translate into slower growth. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we can not accept responsibility for any losses you may incur as a result of this analysis.
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