Oil: Decrease in shipments from Iran supported prices

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Over the past week oil prices continued to rise under the effect of decreased shipments from Iran, which led to increased demand for Urals. Has exacerbated a slowdown in exports out of the Venezuelan port of Jose in connection with the accident in which a tanker crashed into one of the docks, blocking the shipment of about 5 million bar.
The IEA expressed concern about the sharp drop in oil exports from Venezuela, which fell below 1 million bar. a day. While the Venezuelan company, PDVSA, reports production growth to 640 thousand. a day to 1.25 million bar. a day.
Support for the WTI had a decrease in oil reserves in the United States, and the growing season of storms in the Atlantic. As a result, in the intervening period the price of WTI had recovered to $70,25, and the price of the Brent oil grew to $78,0. The spread between grades of oil as of August 30, 2018 amounted to $7.5, the ratio of the spread to the price of WTI has widened to 10.7%.
At the next meeting of OPEC in December 2018 in Vienna will discuss the compensation of falling of deliveries of oil from Iran in connection with the renewal of us sanctions since November of 2018. According to preliminary estimates, the world oil market could face a shortage of supply, although all the oil exports from Iran will not be stopped.
However, in August the export of oil from Iran fell in the spring by about 1 million bar. a day to 2.06 million bar. a day. National Iranian company has lowered the price on September party Iranian Heavy to attract customers. It is believed that oil exports from Iran after the sanctions, will remain at the level of 1 million bar. a day. Due to the fact that oil exports from Iran will continue, the closure of the Strait of Hormuz by Iran is considered unlikely.
At the last meeting of the technical Council evaluation of the discipline of observance of the Covenant OPEC+ in July was indicated at 109%, against 121% in June, which shows a gradual increase in oil production countries of OPEC+. The next meeting of the monitoring Committee will be held on 23 September in Algeria, the technical Council will meet on September 11.
OPEC+ seek to formalize their cooperation in the long term, signing a draft Charter aimed at policy coordination, the stabilization of oil markets in the interests of producers, consumers, investors and the global economy. The Charter will contribute to a better understanding of the fundamentals of the oil market among its members, as well as the promotion of oil and gas in the global energy mix in the long term.
The Iraqi state company SOMO is planning to enter into an agreement with a Chinese state-owned company, Zhenhua Oil on the establishment of a joint venture to increase oil supplies to China. We should not forget that earlier Iran agreed with Iraq on Iranian oil supplies for processing at the Iraqi oil refinery.
Total reserves of oil and oil products in the United States on 24 August 2018 fell by 1.7 million bar. and built 1883,1 million bar. Crude oil inventories last week fell by 2.6 million bar. to the same date last year, oil imports dropped to 7,485 million bar. per day, exports rose to 1,779 million bar. a day. Oil production in the USA last week remained at 11.0 million bar. a day.
As of August 24, 2018 the oil reserves in Cushing amounted to 24.3 million bar. against 24.2 million bar. the week before last and 57.2 million bar. a year ago. Stocks in the strategic reserve has not changed for the last week and amounted to 660,0 million bar.
According to Baker Hughes, as of August 24, 2018 the number of oil wells in the US fell by 9 units to the previous week, totaling 860 units vs 759 units on the same date in 2017.
According to Thomson Reuters Oil Research, the supply of American oil to China in September 2018 will be reduced drastically.
The oil trade against the Shanghai of the contract on the exchange INE continues to expand and accounts for 15% of the average monthly trading volume of three benchmarks in the world.
The volume of oil refining in China in July 2018 rose by 11.6% to 11.95 million bar. per day, but oil product exports from the country decreased to the minimum value for last 4 months. Exports of gasoline dropped to 890 thousand tons, the export of diesel fuel fell to 1.54 million tonnes.
In the first seven months of 2018 oil refineries in China processed 12.07 million bar. of oil per day, which is 9.2% more than the same period last year.
According to METI, the import of oil to Japan in July 2018 fell by 12.8% in annual terms and amounted to 2.92 million bar. a day.
Oksana Lukicheva
Analyst of commodity markets,
“Opening Broker”