Oil prices stabilised earlier on Monday, impacted by rising supplies from the US and the Organization of Petroleum Exporting Countries (OPEC), but buttressed by concerns that weakening production from Iran would tighten markets.

At 6:51 am GMT, US Nymex futures went down $0.7 to $69.73 per barrel (pb) from the previous session, while global benchmark Brent futures traded at $77.67 pb, $0.3 higher.

US rig count rose 2 to a total of 862 for the first time in three weeks, energy firm Baker Hughes reported on Friday. This helped in hiking US production by more than 30% since mid-2016, to 11 million barrels per day (bpd).

OPEC ramped up their production by 220,000 to 32.79 million bpd between July and August, hitting the highest level this year so far, according to a survey by Thomson Reuters. This was attributed to a recovery in Libyan output, while Iraq’s southern exports also hit a record.

Despite the decline in price, Brent contract was “supported by the notion that US sanctions on Iranian crude oil exports will eventually lead to constricted markets,” futures brokerage OANDA Asia-Pacific trading head Stephen Innes told Reuters.

Supplies from Iran, OPEC’s third-largest producer, are already heading to a decline, falling by 150,000 bpd last month. Buyers of the oil-rich country’s output shunned from shipments, Dubai-based Emirates NBD bank commodity analyst Edward Bell told the news agency.

However, the trade dispute between Washington and Beijing threatened to throw a wrench into economic growth in major economies, including China and the European Union (EU), weighing on fuel demand.

China’s manufacturing activity grew at the slowest momentum in over a year in August, as new export orders declining for the fifth month and employers laying off more staff, according to a private survey.

However, “while the analysts continue fretting that $200 billion in tariffs could drag down oil demand, it isn’t at all clear that such type of economic headwinds will topple oil prices given the constant barrage of supply outages,” Innes said.

By 8:00 am GMT, Nymex futures inched down 0.01% to $69.79 pb, while Brent crude futures rose 0.30% to $77.82 pb.

Source » mubasher