Oil Prices Edge Higher Amidst U.S Sanctions on Iran
Oil prices increased in the global commodity market on Thursday as the U.S. slammed fresh sanctions on Iranian exports amidst an imbalance between crude supply and demand.
The market expects China to keep on a growth track after a report showed higher imports ahead of the oil group’s plan to ramp up output in May. In the US, crude oil inventories expanded above expectation, according to the Energy Information Administration.
Brent crude above $66 a barrel after the U.S. imposed fresh sanctions aimed at curbing Iranian oil exports as part of the President Donald Trump administration’s maximum pressure campaign on Tehran.
The United States on Wednesday issued new sanctions targeting Iran’s oil exports, including against a China-based small independent oil refinery, as Trump’s administration seeks to ramp up pressure on Tehran.
The U.S. Treasury Department said in a statement the action would increase pressure on Chinese importers of Iranian oil as Trump seeks to restore his “maximum pressure” campaign on Iran, which includes efforts to drive its oil exports down to zero.
The international oil benchmark trades 0.7% higher at $66.32 a barrel, while the U.S. oil gauge WTI is up 0.9% at $62.36 a barrel. Both contracts are on track for weekly gains, with Thursday marking the last settlement session of the week due to the Good Friday holiday.
Meanwhile, US commercial crude oil inventories increased by 0.1% during the week ending April 11, according to data released by the Energy Information Administration (EIA) late Wednesday.
Inventories rose by around 500,000 barrels to 442.9 million barrels, against the market prediction of 1.6 million barrels decrease. Strategic petroleum reserves, which are excluded from commercial crude stocks, rose by 300,000 to 397 million barrels, the data revealed.
Over the same period, gasoline inventories fell by around 2 million barrels to 234 million barrels. EIA data showed that US crude oil production increased by 4,000 barrels per day (bpd) to about 13.46 million bpd during the week ending April 11.
US crude oil imports decreased by 189,000 bpd to approximately 6 million bpd, while exports increased by 1.85 million bpd to around 5.10 million bpd over the same period.
In the Short-Term Energy Outlook (STEO) released on April 10, the EIA predicted that crude oil output in the country would reach an average of 13.5 million bpd in 2025.
Some members of the Organisation of Petroleum Exporting Countries and allies (OPEC+) submitted plans to make further output cuts to compensate for producing above quotas.
Still, demand concerns linger, with Federal Reserve Chair Jerome Powell warning that consumers are likely to face higher prices as a result of U.S. tariffs and that the central bank could have less flexibility to quickly cushion the economy.
European natural gas prices rise in early trade, supported by a report that China would be open to trade talks with the U.S. under certain conditions.
The benchmark Dutch TTF contract is up 1.2% to 35.74 euros a megawatt hour and on track for a weekly gain of more than 7%. The EU countries are seeking extra flexibility on the bloc’s gas storage targets ahead of the winter season. Dangote Refinery Slashes Petrol Price to N835 Per Litre
