United States crude drops 2.7%, as traders cash in on rally

Daily November WTI Crude Oil

Daily November WTI Crude Oil

"Trump blamed OPEC for rising oil prices in his speech at the United Nations, but the real reason is Trump himself and his sanctions on Iran", IRNA reported on Tuesday quoting Zanganeh as saying. That would be a record level, noted analysts at Commerzbank.

Iran has officially announced that among its oil customers, only South Korea has stopped the purchase of crude from Iran.

Last month, Indian buyers lifted purchases of Iranian crude to 502,000 bpd, up 111,000 bpd over August, in "a last gasp" of purchases "before sanctions actually hit", a USA -based trader said, adding that those additional barrels displaced US crude.

Novak doesn't rule out that oil prices could reach $100 a barrel, but noted that this won't be good for the global economy, producers and consumers alike. Due to those uncertainties, the market is now very nervous and emotional, and traders and other market participants could continue to make decisions based on those uncertainties and push prices higher, he said.

Iranian Minister of Petroleum Bijan Zangeneh said on Tuesday Iran will go full-throttle to maintain its market share as he blamed Trump for the surge in oil prices.

Oil headed for the longest run of weekly gains since the start of 2018. The United States seeks to block Iran's worldwide oil sales with the move.

The investment bank said there was enough oil to meet demand, but "global spare capacity is dwindling to the lowest level that we can document. meaning any further supply disruptions would be hard for the market to manage - and could lead to spiking crude oil prices".

Besides, Iran's budget for the current fiscal year was based on the oil price of 55 US dollars a barrel, but the average oil price has risen to 70 dollars a barrel so far, he said. Meanwhile, the number of short positions in the six biggest oil futures and options contracts has fallen to the lowest level since before 2013.But Goldman Sachs says the uptrend may not last.

Lopsided positioning has often been the precursor to a sharp reversal in the price trend when fund managers attempt to realize profits by closing some positions.

"The Saudis won't flood the market and they don't want to see it oversupplied", said Giovanni Staunovo, an analyst at UBS Group AG.

"They're taking a pause after yesterday's sell-off", said Andrew Lipow, president of Lipow Oil Associates. Opec and non-members agreed in June to ease production limits, in order to take some pressure off prices.

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