Oil recovers alongside U.S. stock market

Why India needs to rethink its relationship with OPEC

Why India needs to rethink its relationship with OPEC

These gyrations reflect the proliferation of huge risks to both supply and demand: From the slump in global equity markets to signs of weakness in the global economy; from the collapse of Venezuela's oil industry to USA efforts to sanction Iran's crude exports out of existence.

Highlighting Iran's "steady and stable supply of oil to customers", he stressed that no country has "the capacity to provide a replacement for the Iranian oil in the world's demanding market". "Two of our oil companies have made nominations to purchase Iranian oil in November".

"It will become an open-ended agreement to continue to monitor (the oil market) and stabilise it", Falih said.

US nuclear program-related sanctions against Iran will go in effect by November 5. The 3-month credit period offered by Iran results in lower working capital for domestic Indian refiners leading to lower borrowings and increased floating money.

Crude oil prices have stayed high partly due to USA demands that other nations join economic sanctions and halt imports from Iran by next month. The exact effect of the sanctions will depend on the total volumes of crude oil and condensate that comes off the market and the response from members of the Organization of the Petroleum Exporting Countries (OPEC) and other countries.

From Nigeria, India's crude oil imports dropped 6.36 per cent to 1.03 MT in September.

Recent moves in Brent crude illustrate this contradiction.

He stressed that Saudi Arabia is a very responsible country, and for decades, has used its oil policy as a responsible economic tool and isolated it from politics.

Gasoline production decreased last week, averaging 10 million barrels per day. Meanwhile, Russia suggested its current output is higher than in September. The bank expects Brent to trade at $85 to $90 a barrel in the next three to six months.

The net long position-the difference between bullish and bearish bets-in WTI dropped 14 percent in the week to October 16, Bloomberg calculations of U.S. Commodity Futures Trading Commission data show. The stocks jumped to more than 9 million barrels.

Uncertainty over future Iranian exports remains high.

Oil prices on Wednesday clawed back a fraction of their hefty losses the day before that came after Saudi Arabia said it would make up for supply disruptions from USA sanctions starting next month on Iran's petroleum exports.

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.