Oil prices rise, and Barclays sharply revises its forecasts

OPEC August oil output tops 2018 high: Poll

OPEC August oil output tops 2018 high: Poll

The U.S. wants to reduce Iran's oil exports effectively to zero with renewed sanctions in November after pulling out of the nuclear deal between Iran and western powers in May.

Japan's Iranian oil imports increased year on year for the third consecutive month in July as refiners rush to take cargoes before USA sanctions come into effect against the Middle East supplier in November.

The Organization of Petroleum Exporting Countries and its allies agreed in June to increase combined output by 1 million barrels a day to meet consumer demand and prevent a sharp rise in prices.

Yesterday, WTI ended the day slightly higher while Brent crude traded at highs last seen in July earlier this year.

USA crude was unchanged at $69.80/Bbl, Kallanish Energy reports.

Global oil markets have tightened over the last month, pushing up Brent prices by more than 10 percent since the middle of August.

Resource-pour Japan relies heavily on imports of oil from the Middle East, though crude from Iran accounted for just 5.3 percent of the country's total imports past year.

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SCI had a contract until August to import Iranian oil for Mangalore Refinery and Petrochemicals Ltd (MRPL), two sources familiar with the matter said.

Sheikh Mohammed bin Khalifa Al Khalifa, oil minister for Bahrain, said, "I think there is a risk on the demand side; obviously the trade issue is going to impact demand in a negative fashion if it continues, [and] you've got the strong dollar, which is another factor".

In fact, Russian Federation surpassed Saudi Arabia as China's largest source of foreign crude oil in 2016, exporting 1.2 million b/d to China in 2017 compared with Saudi Arabia's 1.0 million b/d.

According to reports by Japanese news media Jiji Press agency and Kyodo on September 3rd, the country's major oil wholesalers are preparing to suspend Iranian crude imports next month in response to USA sanctions against Tehran and threats to companies doing business with Iran. The bank also said it expects Brent to average at $75 per barrel, a huge jump from its prior prediction of $55 per barrel.

Still, worries persist that the market is due for a tightening anyway: Stephen Innes, head of trading for Asia-Pacific at OANDA, said Brent was "supported by the notion that USA sanctions on Iranian crude oil exports will eventually lead to constricted markets".

India is the second largest buyer of petroleum from Iran after China, and Iran is the third largest supplier to India after Saudi Arabia and Iraq.

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