Oil in Global Economy Series: Russia's oil production at record high

Oil in Global Economy Series: Russia's oil production at record high

Oil in Global Economy Series: Russia's oil production at record high

Oil rose last month as supply concerns intensify before renewed American sanctions aimed at curbing Iranian export kick in, adding to concerns over Venezuela's plunging production.

"The prospects of increased supplies from OPEC and her allies, and weaker demand from China and other emerging markets could weigh further on oil prices going forward, or at least limit the upside potential", said Fawad Razaqzada, market analyst at futures brokerage Forex.

"With the anticipation of up to 1.5 million barrels per day affected by the U.S. sanctions on Iran, one would expect prices to move higher in the weeks ahead".

India, Iran's top oil client after China, will finalise its strategy on crude purchases from Tehran after a meeting with top U.S. officials this week, a senior government official told Reuters last week. The sanctions targeting oil sales will be effective from November 5, but buying activity seems to be slowing down already.

International Brent crude futures fell 37 cents, or 0.5 percent, to $77.80 a barrel.

Crude prices are taking a step back in early Monday trading and WTI barrel costs are sagging back into recent swing lows near the $70/barrel critical handle.

The Organization of the Petroleum Exporting Countries (OPEC) said on Wednesday it expected global oil demand to break through 100 million bpd for the first time this year.

Britain's Barclays bank said on Tuesday that oil markets had changed since 2017 when worries about rising supply were more evident.

US drillers added oil rigs for the first time in three weeks, increasing the rig count by 2 to 862.

Reports of the UAE raising oil production come a few days after an OPEC source said that the UAE's ally and OPEC's biggest exporter Saudi Arabia will report to OPEC that its crude oil production increased in August compared to July to average 10.424 million bpd last month. According to a private survey, export orders have dropped down for the fifth straight month.

"Iraq has oil that's cheap and relatively easy to produce", Mustafa Ansari, a senior economist at Arab Petroleum Investments Corp., said in an interview in Muscat, Oman. He stated that it was not yet clear whether such economic headwinds would be able to topple oil prices. As per the trade data and Reuters, the company has set a record discount price of its crude oil for September since 2004. This could mean that consumers in the U.S. could pay up to as much as $4 per gallon for unleaded gasoline.

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