Published: Sun, July 01, 2018
Money | By Wilma Wheeler

US Reinstates Sanctions Against Iran

US Reinstates Sanctions Against Iran

An oil pump jack is seen at sunset near Midland, Texas, U.S., May 3, 2017. He said that as of now, the focus of the government in terms of the economy rests on job creation, elimination of poverty, production and the regulation of the market.

Oil prices climbed Thursday, with the USA benchmark holding ground at its highest levels since 2014 in the wake of the biggest weekly decline of the year for domestic crude supplies.

Meanwhile, U.S. total domestic crude output stood at 10.9 million barrels a day last week, unchanged from the previous week, said the EIA.

"Removing this from the global market in a few months is not possible", the Iranian official said.

United States oil production continues putting downward pressure on fuel prices, and for the third week in a row, USA production reached 10.900 million bpd last week: close to the 11 million bpd production that many had forecast for the year.

"You had a very significant, nearly overwhelming draw in Cushing", said Thomas Finlon, director of Energy Analytics Group LLC in Wellington, Florida.

The reported Cushing draw reflected just one day of a production disruption at a supplier in Canada.

"Next week, you're going to have a Cushing storage number that includes seven days of the Syncude outage".

After seeing a surge in buying on Monday, U.S. Treasury debt yields edged higher as concerned lingered that trade tensions could hurt economic growth, though safe-haven buying was capped on anticipation of more interest rate hikes from the Federal Reserve. This encourages further drawdowns from storage. They also cited concern about the risk of a disruption to supplies from Africa and the Middle East.

In Libya, a power struggle between the official government and rebels has left it unclear who will handle the country's large oil exports, although as of Tuesday the oil ports of Hariga and Zueitina in eastern Libya were working normally. "We can easily find crude if we need to replace Iranian oil", he said.

Trying to make up for disrupted supply, the Organization of the Petroleum Exporting Countries (OPEC) and a group of non-OPEC partners including top producer OPEC said late last week they would increase output.

In the end, Saudi Arabia pushed through a rise of 1 million bpd at the Vienna meeting, in line with the plan it had agreed with Moscow more than a month earlier.

And if Venezuela's output continues to fall, which seems likely, and Iran's production is curbed by USA sanctions, the three Gulf allies will see their share of OPEC output climb to the highest level since 1981. In a special address on Thursday afternoon, Haley said, "The world is united against Iran having nuclear weapons because we all have good reason to worry about what Iran would do with those weapons".

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