Crude worldwide plunges after questions about oil demand

Crude worldwide plunges after questions about oil demand

Based on a four-week average observation, United States crude oil net imports reached a record low of 5.2mn bpd in the previous week. The slump has rattled producers, and the Organization of Petroleum Exporting Countries has signaled it may cut output next year - an option that'll be part of talks when the group meets with partners in Abu Dhabi on Sunday.

Strong output growth from USA shale producers as well as Russia, Saudi Arabia, the United Arab Emirates and Kuwait should be enough to compensate for the loss of Iranian exports.

The measure announced on Monday was "interim" and only allowed the continuation of the three non-proliferation projects "under the strictest scrutiny to ensure transparency and maintain constraints on Iran" Efe quoted the State Department as saying.

He noted that the committees should immediately stop their work.

USA crude oil production as estimated by the Energy Information Administration showed no change in production for the week ending October 26 at 11.2 million bpd-resuming the earlier forever-high reached on October 05.

That is likely to play out in the form of weaker demand for oil.

This occurs under the realisation that USA sanctions against Iran may not yield as big a drop as feared while USA production continues to ramp higher and the growth outlook for 2019 is being called into question.

The Trump administration on Monday reinstated sanctions on Iran's energy, banking and shipping industries, marking the end of a 180-day grace period the US set for oil buyers to reduce to zero imports from Iran. Iran said it has so far been able to sell as much oil as it needs to.

SINGAPORE/LONDON-Iran's oil exports have fallen sharply since U.S. President Donald Trump said at mid-year he would reimpose sanctions on Tehran, but with waivers in hand the Islamic Republic's major buyers are already planning to scale up orders again.

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A return to oil production cuts by OPEC and its allies next year cannot be ruled out, two OPEC sources said on Wednesday, to avert a possible supply glut that could weigh on prices, Reuters reported.

But Trump carved out exemptions for China, Japan, South Korea, India and Taiwan in Asia, as well as Greece, Italy and Turkey in Europe.

"From the Suez Canal to the Strait of Malacca and all choke points in between, Iranian tankers are now a floating liability", Hook told reporters.

On November 5, the United States imposed what the Trump administration has touted as the "toughest ever" sanctions on Iran.

As a result of pre-sanctions pressure by Washington, Iran's oil exports in November may not exceed 1 million to 1.5 million bpd, according to industry estimates.

The exception granted by Secretary of State Mike Pompeo to U.S. sanctions reimposed on Iran on Monday also will permit the construction of a railway line from Chabahar port to Afghanistan, and for shipments to the war-torn country of non-sanctionable goods, like food and medicines, the spokesman said. The granting of the waivers and pledges from Saudi Arabia to fill any supply gaps has since led oil prices to hover $75 a barrel.

United States government waivers will allow some of Iran's biggest customers to buy crude from Opec's No. 3 producer for another six months, damping shortage fears. The government's official supply report is due at 1530 GMT.

The price of oil, as measured by its USA benchmark, has entered bear market territory - in other words, a fall of 20% or more from its peak - in barely a month.

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