ck10 October 2018, News Wires — Oil prices edged higher on Tuesday on growing evidence of falling Iranian crude exports before the imposition of new U.S. sanctions, as well as a partial production shutdown in the Gulf of Mexico because of Hurricane Michael.
Brent crude futures rose 81 cents to $84.72 a barrel by 12:44 p.m. EDT (1644 GMT). The global benchmark hit a four-year high of $86.74 last week but slipped as low as $82.66 on Monday.
U.S. West Texas Intermediate (WTI) crude futures gained 49 cents to $74.78 a barrel.
Iran’s crude exports fell further in the first week of October, according to tanker data and an industry source, as buyers sought alternatives ahead of U.S. sanctions that take effect on Nov. 4.
Iran, OPEC’s third-largest producer, exported 1.1 million barrels per day (bpd) of crude in that seven-day period, Refinitiv Eikon data showed. An industry source who also tracks exports said October shipments so far were below 1 million bpd.
That is down from at least 2.5 million bpd in April, before President Donald Trump in May withdrew the United States from a 2015 nuclear deal with Iran and re-imposed sanctions. The figure also marks a further fall from 1.6 million bpd in September.
“This rapidly declining availability of Iranian barrels within the anticipatory phase of the oil sanctions could prove to be a powerful bullish force but also one that can quickly subside once these sanctions are fully realized next month,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
A vessel carrying 2 million barrels of Iranian oil discharged the crude into a bonded storage tank at the port of Dalian in northeast China on Monday, according to Refinitiv Eikon data and a shipping agent with knowledge of the matter.
The country previously held oil in storage at Dalian during the last round of sanctions in 2014 that was later sold to buyers in South Korea and India.
Iranian Oil Minister Bijan Zanganeh on Monday described a Saudi claim that the kingdom could replace Iran’s crude exports as “nonsense.”
Meanwhile, oil companies operating in the Gulf of Mexico shut down nearly 20 percent of oil production as Hurricane Michael intensified and headed for a path up the eastern U.S. Gulf.
If forecasts prove accurate, the hurricane would largely miss major oil-producing assets, analysts said, but a change of track could widen the impact.
The International Monetary Fund on Tuesday cut its global economic growth forecasts for 2018 and 2019, saying trade tensions and rising import tariffs were taking a toll on commerce while emerging markets struggle with tighter financial conditions and capital outflows.
“The preponderance of evidence seems to suggest that any talk of slowing demand isn’t going to come fast enough to offset the tight market conditions we’re going to have in the next quarter,” said Phil Flynn, an analyst at Price Futures Group in Chicago.