OPEC oil export revenues set to increase

OPEC oil export revenues set to increase

While Iran's exports have moved in Trump's favor, the president faces the predicament of wanting oil prices to come down before USA midterm elections on November 6.

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

The countries are the world's two largest economies.

The OPEC Chief did not specify how crude producers would compensate for declining exports from Iran, with new United States sanctions due to hit the Islamic republic's oil industry on November the 4th.

According to Bloomberg tanker tracker data, Iran now has four supertankers carrying about 7 million barrels of crude anchored off its main export terminals for at least seven days.

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USA oil futures rose more than $1 a barrel on Wednesday, bolstered by a fifth weekly crude inventory drawdown and strong domestic gasoline demand, amid ongoing supply concerns over US sanctions on Iran that come into force in November.

Iran is the third-largest oil producer in the after Saudi Arabia and Iraq.

Saudi Arabia is now comfortable with Brent oil prices rising above $80 a barrel, at least in the short term, as the global market adjusts to the loss of Iranian supply from USA sanctions, according to people familiar with the kingdom's view.

Brent oil traded near the highest level in a week after Saudi Arabia was said to be content with the global benchmark crude breaking above $80 a barrel.

The producer group said in June that it would agree to some supply increases starting in July, though the specific targets were not announced at the time.

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Meanwhile, oil output from seven major USA shale formations is expected to rise by 79,000 barrels per day to 7.6 million bpd in October, the U.S. Energy Information Administration said Monday.

Increases in both crude oil prices and in net OPEC oil exports drove revenues higher in 2017, and the EIA expects that revenues will continue to increase in 2018, based on its August 'Short-Term Energy Outlook'. Concern over supply overshadowed a surprise increase in USA oil inventories.

Official inventory data from the U.S. Energy Information Administration will be released on Wednesday.

"Overnight chatter suggests that the Saudis are more than happy with a Brent price above $80 or that OPEC, more generally, is not considering raising output".

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