OPEC chief: Cartel must stay together as USA sanctions Iran

OPEC chief: Cartel must stay together as USA sanctions Iran

OPEC chief: Cartel must stay together as USA sanctions Iran

U.S. West Texas Intermediate (WTI) futures rose 28 cents to $69.27 a barrel after posting a drop of 20 cents earlier in the trading session.

Iran's crude exports are already falling as the USA prepares to curb Tehran's ability to sell oil and participate in global financial markets.

USA crude stockpiles rose by 1.2 million barrels to 397.1 million in the week to September 14, the American Petroleum Institute said.

U.S. Energy Secretary Rick Perry said in an interview with Reuters on Friday that he did not expect any price spikes and that the world's top three oil producers could between them raise global output in the next 18 months.

Asked whether a deal between OPEC and other producers, a group known as OPEC+, could discuss increasing output from levels agreed in June, Novak said: "I think we have the possibility to discuss any possible scenarios".

Oil prices inched up on Wednesday as concerns that producers may not be able to cover a shortfall in supply once USA sanctions on Iran kick in outweighed a gain in US stockpiles. The world's biggest crude exporter is said to be comfortable with Brent prices rising as markets adjust to the loss of Iranian supply due to US-imposed sanctions, with oil exports from the nation plunging about 35 per cent since April.

Bloomberg quoted oil analysts as saying that the world demand for OPEC crude oil will reach 33.5 million barrels per day in the fourth quarter of this year, while its current production is estimated at 32.7 million barrels per day.

"It will be no easy feat for Saudi Arabia and Russian Federation to balance declining production from Iran and Venezuela", said Abhishek Kumar, senior energy analyst at Interfax Energy in London, Reuters reported.

For example, prices could weaken if China retaliates by cutting off the USA supply chain for raw materials and small components for US made technological devices.

Oil futures also drew support from geopolitical risk on Tuesday.

China, one of the world's largest oil consumers, on Tuesday added $60 billion of USA products to its import tariff list.

The tariffs are likely to limit economic activity in both the China and the United States and that should lower oil demand growth as less fuel is consumed to move goods for trade.

"The brinkmanship between Beijing and Washington has the potential to severely impact the competitiveness of USA crude oil and petroleum products in the Chinese market, and it will also deter Chinese investment in the US energy sector", said Abhishek Kumar, senior energy analyst at Interfax Energy in London.

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