India's love affair with United States crude intensifies amid Iran puzzle

Crude Oil Supply

Oil prices dipped on Wednesday after China reported relatively weak import data, although the market remained well supported by falling USA crude inventories and the introduction of sanctions against Iran.

The West Texas Intermediate for September delivery rose 0.16 US dollar to settle at 69.17 dollars a barrel on the New York Mercantile Exchange, while Brent crude for October delivery added 0.90 dollar to 74.65 dollars a barrel on the London ICE Futures Exchange.

The President Donald Trump administration has urged all countries to end imports of Iranian oil by November 4 as part of its new policy of hostility towards Tehran after Washington's unilateral exit from the 2015 nuclear agreement.

Indian Oil Corp, the country's top refiner, will buy 6 million barrels of United States crude oil for November to January delivery through a mini-term tender, its head of finance said on Wednesday.

Iran's fleet of very large crude carriers, or VLCCs, and Suezmax tankers - the largest that can fit fully-laden through the Suez Canal - has always played an important role in delivering Iranian crude to customers, but it is increasing as insurers and global shipping companies react to the sanctions snap-back.

China is the biggest and the most valued customer for Iran's oil and imports more than 650,000 barrels of oil per day from Iran.

European officials have said their governments are considering opening accounts for Iran at their national banks, which could receive oil payments.

U.S. West Texas Intermediate (WTI) crude CLc1 futures fell $1.85 to $67.32 a barrel, a 2.7 percent loss.

This week we will continue to keep an eye on the trade dispute between the USA and China.

FGE added, however, that U.S. would be only filling a part of the void created by a fall in imports from Iran.

"The US seems hell-bent on regime change in Iran", said Greg McKenna, chief market strategist at futures brokerage AxiTrader.

The total exported quantities of Oman crude oil during July 2018 has reached 24.08 million barrels, with a daily average of 776,800 barrels.

Output was expected to rise 1.31 million bpd to 10.68 million bpd in 2018, lower than last month's forecast of growth of 1.44 million bpd to 10.79 million, the EIA said.

The buildup was mainly due to 9.6 million barrels of lower exports for the week ending July 27, compared with the previous weekly report levels.

The first and second cargoes will be received at the ports of Vadinar and Mundra, while the third cargo will go to Paradip, he said.

The concerns over possible supply disruptions in Iran come at a time when analysts warn that a global heatwave could increase oil demand.

This mostly impacts demand for power fuels such as thermal coal and natural gas.

This story has not been edited by Firstpost staff and is generated by auto-feed.

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