Oil rises 2% with Brent futures hitting a two-week high

Virginia Carson
August 26, 2018

The global benchmark for crude oil, Brent International's futures contract for October delivery was trading at $72.60 per barrel, which was an increase of $0.39 cents.

By October, Nigerian oil supply is projected to hit a three-month high with a total of 38 cargoes, derived from daily loadings averaging 1.12 million barrels.

Oil prices also drew support from the prospect of a drop in crude exports from Iran in response to new USA sanctions on the No. 3 producer in the Organization of the Petroleum Exporting Countries. This demand is coming mainly from China and India, with Chinese imports of United States crude having more than doubled since the beginning of 2017.

USA energy companies cut nine oil drilling rigs this week, the biggest reduction since May 2016, General Electric Co's (GE.N) Baker Hughes energy services firm said.

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Revenues have improved in recent months, however, jumping 83 percent in the first quarter of 2018 to $2.2 billion (£1.7 billion). John Cooper, 69, died in his room, and his wife Susan, 63, a Thomas Cook employee, died a short while later in hospital.

According to BNP Paribas' London head of commodity markets strategy, Harry Tchilinguirian, considering the amount of oil lost from Iranian exports, it would need increases in production from other suppliers like Saudi Arabia to stabilize the oil market.

Concerns that an escalating trade war between China and the US could slow economic growth and weigh on crude purchases eased slightly after sources told Reuters that China's Unipec will resume purchases of USA crude oil in October, after a two-month halt due to the fight.

USA inventory data has been volatile in recent weeks, with the EIA last week reporting a 6.8 million barrel increase in crude stocks for the week prior. The three fields contribute about 45,000 to 50,000 bpd to the North Sea's Forties and Brent crude streams. The crude oil benchmark is now trading at $66.90 per barrel.

But prices have come down since then in the wake of plans by the Organization of the Petroleum Exporting Countries and partner producers like Russian Federation to begin ramping up crude output after more than a year of holding back production. The global benchmark crude traded at a $6.90 premium to WTI.

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This is according to the OPEC revenues fact sheet report, published by the US Energy Information Administration (EIA) on Tuesday.

Crude stocks at the Cushing, Oklahoma delivery hub rose by 772,000 barrels.

Meanwhile, a Chinese trade delegation is in Washington to discuss the trade dispute with the US side. It came second to the USA port district of Chicago, at 19 percent.

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