Singapore – Oil prices were mixed on Tuesday, with the US fuel markets tightening, while the trade dispute between China and the US is dragging on international rough contracts.
US West Texas Intermediate (WTI) raw futures for delivery in September rose by 27 c, or 0.4%, at 3.06 pm GMT, with $ 66.70 a barrel. The contract expires on Tuesday.
The more active October futures increased by 7c, or 0.1%, to $ 65.49 per barrel.
Traders said the markets in the US would be boosted in the coming months by tightening the outlook for fuel markets.
Stocks in the US for refined products such as diesel and fuel oil for this time of the year are at their lowest level in four years.
This happens just before the peak period for these fuels, with diesel needed for tractors to harvest crops and the arrival of colder weather during the autumn of the northern hemisphere, which increases the consumption of fuel oil.
Outside the US, Brent's crude oil futures contracts were slightly weaker, trading at $ 72.18 per barrel, 3c lower than the last closing price.
This followed the offer in the US of Monday 11 million barrels of crude oil from its Strategic Petroleum Reserve (SPR) for delivery from 1 October to 30 November.
The oil released could compensate for the expected supply problems of the US sanctions against Iran, which will focus on its oil industry from November.
Because of the sanctions, the French bank BNP Paribas said oil production from OPC oil dealer, of which Iran is a member, is expected to decrease from an average of 32.1 million barrels per day in 2018 to 31.7 million barrels per day in 2019.
Nevertheless, traders said that overall market sentiment was cautious because of concerns about demand prospects amidst the trade dispute between the US and China.
This week there must be a Chinese trade delegation in Washington to resolve the dispute, but US President Donald Trump told Reuters in an interview on Monday that he does not expect much progress and that resolving the trade dispute with China will "take time ".
Sufficient oil, despite Iran
The effect of the sanctions on Iran is not yet clear.
China has indicated that despite the US sanctions it will continue to buy Iranian oil.
The supply restriction in Iran can also be more than compensated by production increases outside Opec.
BNP Paribas said that the production of non-OPEC would probably grow by 2 million barrels per day in 2018 and 1.9 million barrels per day by next year.
"Depending on when the restrictions of the pipeline infrastructure in the US are lifted, the growth of the non-Opec supply may turn out to be higher by the end of 2019 than currently assumed," said the bank.
The search for new oil has increased globally over the past two years, with the global number of counts from 1,013 at the end of July 2016 to 1,664 in August 2018, according to the energy services company Baker Hughes.
The largest increase was in North America, where the number of counts rose from 491 to 1,057 in the past two years.
How the prices develop depends on the demand.
"We see global demand for oil rising by 1.4 million barrels per day, both in 2018 and in 2019," said BNP Paribas, implying that global markets are likely to be adequately supplied.
Reuters
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