Crude oil prices dropped slightly to end a volatile week on the New York and London markets on Aug. 3. Some unilateral US sanctions on Iran are scheduled to become effective Aug. 7, but this does not yet include oil.
US President Donald Trump in May announced plans to withdraw from the 2015 international agreement that resulted in the lifting of sanctions in exchange for Iran’s cooperation on its nuclear program.
US sanctions against Iran are scheduled to be implemented in two phases, based on 90-day and 180-day periods set by the US Department of Treasury. Sanctions on oil exports are scheduled to become effective Nov. 4.
Trump has asked Iran’s other trading partners to also stop buying Iran’s oil. But US oil sanctions on Iran might not prove as effective as did previous sanctions under an international alliance.
Asian countries buy Iranian oil. China has criticized US officials for what China considers unfair trade practices and for imposition of tariffs on US trading partners.
Reuters reported China has retaliated by slapping tariffs on American goods and has recently proposed tariffs on LNG as well as US crude exports.
Meanwhile, Aug. 3 news reports suggested Saudi crude production dropped to about 10.3 million b/d in July, down from 10.49 million b/d in June, according to delegates with the Organization of Petroleum Exporting Countries.
The comment about lower Saudi production “lent support” to rising oil prices in early Aug. 6 trading, Commerzbank analysts said.
Saudi production was expected to have risen during July. OPEC and major non-OPEC producers, including Russia, agreed in late June to increase production during July.
OPEC said it would comply by 100% with existing production-cut targets but would no longer hold back production beyond those targets, which expire on Dec. 31.
Energy prices
The light, sweet crude contract for September delivery on the New York Mercantile Exchange fell by 47¢ to close at $68.49/bbl on Aug. 3. The October contract declined 31¢ to settle at $67.35/bbl.
The NYMEX natural gas price for September gained 3¢ to a rounded $2.85/MMbtu. The Henry Hub cash gas price gained 5¢ to $2.84/MMbtu.
Ultralow-sulfur diesel for September edged down less than a penny to a rounded $2.13/gal. The NYMEX reformulated gasoline blendstock for September also fell less than 1¢ to a rounded $2.06/gal.
Brent crude oil for October decreased 24¢ to $73.21/bbl on London’s International Commodity Exchange. The November contract fell 15¢ to settle at $73.53/bbl. The gas oil contract for August was $650/tonne, up $4.25.
OPEC’s basket of crudes average price for Aug. 3 was $72.07/bbl, up 46¢.
Contact Paula Dittrick at [email protected].
