Global oil production hits a new record, led by U.S. and OPEC

Oil prices climb as Iran sanctions loom

Europe's largest bank is the latest global institution to revise its oil price assumptions as concerns grow over how Iranian crude will be replaced by the market once U.S. sanctions come fully back into force in November. US light crude CLc1 fell $1.15 to a low of $69.22 a barrel.

Crude Oil futures in NY climbed 2.5%, while gasoline futures popped higher by 2.8% Tuesday.

The November delivery of Brent crude opened at $79.44 per barrel at the start of Wednesday's trading on the futures market, a 0.44 per cent increase since the previous session's close.

It estimates that OPEC producers are now sitting on some 2.7 million barrels of spare capacity - 60 percent of which is in Saudi Arabia.

The International Energy Agency said Thursday that the global oil supply reached 100 million barrels a day for the first time ever.

South Korea has chose to comply with US demands to cut oil imports from Iran to zero, becoming the first to do so out of the top three buyers.

This helped offset declines in Venezuela, where production is declining due to the economic crisis, and Iran, as buyers walked away ahead of the USA sanctions. In August, rising output in Libya, Iraq, Nigeria and Saudi Arabia offset declines in Iran, which is about to face new US sanctions that are already hurting Iranian exports, and in Venezuela.

USA crude oil production fell by 100,000 bpd to 10.9 million bpd as the industry faces pipeline capacity constraints. "Things are tightening up".

"According to Bloomberg, in case the Iran sanctions come into place, oil price could go up to $150 a barrel", reported ET.

As Florence moves closer to the southeastern coast of the United States, the storm appears likely to strengthen, forecasters said.

Russian energy minister Alexander Novak said global oil markets were fragile due to geopolitical risks and supply disruptions. Speculation is swirling over whether a potential supply gap can be filled by the group at a time when American crude inventories are falling to the lowest since 2015, and output losses are witnessed in Iran.

Nigerian crude oil differentials were largely unchanged yesterday, after a series of offers from Shell for October-loading cargoes drew no buyers, and even BP, which has been an active bidder this week, showed unwillingness to pay higher prices.

Prices were also pushed up by Hurricane Florence, which is expected to make landfall on the U.S. East Coast on Friday, and which has caused fuel shortages following the evacuation of millions of households and businesses.

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