The global oil markets gains were caped and pulled down by further signs of growing U.S. production even as the prices across various markets edged up on Monday on fears that new U.S. sanctions against Iran could be extended to affect crude supplies.
Very recently, the U.S. President Donald Trump's administration imposed sanctions on individuals and entities linked to Iran's elite Revolutionary Guards military unit prompted by a recent Iranian ballistic missile test and since then the tensions between Tehran and Washington have been on the rise.
Up 10 cents from their last close, trading at $56.91 per barrel at 0320 GMT was brent crude futures, the international benchmark for oil prices.
There was a rise of 8 cents at trading at $53.91 a barrel was U.S. West Texas Intermediate (WTI) futures.
There were fears that U.S. sanctions could be tightened further to impact Iranian oil exports, which were only allowed to return to normal last year due to the present strain between Tehran and the United States, said traders in the market.
"This was countered somewhat by data showing another strong rise in rig activity in the U.S.," ANZ bank said on Monday.
Energy services firm Baker Hughes Inc said on Friday, that the total count was brought up to 583, the most since October 2015, by U.S. drillers who added 17 oil rigs in the week to Feb. 3.
The efforts to end global oil oversupply by cutting their output by a planned average of almost 1.8 million barrels per day (bpd) during the first half of the year by the Organization of the Petroleum Exporting Countries (OPEC) and other producers like Russia were undermined by the rising U.S. production.
As the the oil cartel group reduces supplies to regions in Europe and North America where demand growth is slower or where other suppliers are more dominant, the market rebalancing act are being delayed by OPEC's efforts to shield its biggest customers in Asia from the cuts.
The price movements make this very evident. Since its peak in early January, when the cuts started, brent crude futures are more than 2 percent below that peak.
A slowdown in Chinese imports, a core pillar of global demand growth over the past years, has the potential to create a further downward pressure in the oil market and crude prices.
"China's crude oil imports will soften in H117, due to a heavy refinery maintenance season and weaker run-rates at the independent teapot refineries," BMI Research said.
"Up to 900,000 bpd of refining capacity - equivalent to 6.0 percent of total refining capacity - could be shut at various points over the Q117-Q217 period, dragging on imports," it added.
BMI said that also weighing down on the overall import demand would be a reduction in the import quotas for China's independent refiners. At 68.81 million tonnes than the year ago period, the first round of 2017 licenses were 6.7 percent lower, the researchers noted.
(Source:www.reuters.com)
Very recently, the U.S. President Donald Trump's administration imposed sanctions on individuals and entities linked to Iran's elite Revolutionary Guards military unit prompted by a recent Iranian ballistic missile test and since then the tensions between Tehran and Washington have been on the rise.
Up 10 cents from their last close, trading at $56.91 per barrel at 0320 GMT was brent crude futures, the international benchmark for oil prices.
There was a rise of 8 cents at trading at $53.91 a barrel was U.S. West Texas Intermediate (WTI) futures.
There were fears that U.S. sanctions could be tightened further to impact Iranian oil exports, which were only allowed to return to normal last year due to the present strain between Tehran and the United States, said traders in the market.
"This was countered somewhat by data showing another strong rise in rig activity in the U.S.," ANZ bank said on Monday.
Energy services firm Baker Hughes Inc said on Friday, that the total count was brought up to 583, the most since October 2015, by U.S. drillers who added 17 oil rigs in the week to Feb. 3.
The efforts to end global oil oversupply by cutting their output by a planned average of almost 1.8 million barrels per day (bpd) during the first half of the year by the Organization of the Petroleum Exporting Countries (OPEC) and other producers like Russia were undermined by the rising U.S. production.
As the the oil cartel group reduces supplies to regions in Europe and North America where demand growth is slower or where other suppliers are more dominant, the market rebalancing act are being delayed by OPEC's efforts to shield its biggest customers in Asia from the cuts.
The price movements make this very evident. Since its peak in early January, when the cuts started, brent crude futures are more than 2 percent below that peak.
A slowdown in Chinese imports, a core pillar of global demand growth over the past years, has the potential to create a further downward pressure in the oil market and crude prices.
"China's crude oil imports will soften in H117, due to a heavy refinery maintenance season and weaker run-rates at the independent teapot refineries," BMI Research said.
"Up to 900,000 bpd of refining capacity - equivalent to 6.0 percent of total refining capacity - could be shut at various points over the Q117-Q217 period, dragging on imports," it added.
BMI said that also weighing down on the overall import demand would be a reduction in the import quotas for China's independent refiners. At 68.81 million tonnes than the year ago period, the first round of 2017 licenses were 6.7 percent lower, the researchers noted.
(Source:www.reuters.com)
