Crude Price Suffers Over US-China Trade War

China rejects US demand to reduce Iran oil imports: report

According to Reuters, oil prices rose on Monday after Saudi crude production registered a surprising dip in July and as American shale drilling appeared to plateau.

The U.S. has been unable to persuade China to cut Iranian oil imports, according to two officials familiar with the negotiations, reports Bloomberg.

The West Texas Intermediate (WTI) for September 2018 shipment drops by Dollars 0.47 to a level of USD 68.49 per barrel at the New York Mercantile Exchange.

"Indeed, China could be motivated to import even more oil from Iran, as Iranian oil is displaced from European markets due to U.S. sanctions and will be marketed at a discount".

Still, with Russian Federation, the United States and Saudi Arabia now all producing 10 million to 11 million bpd of crude, just three countries now meet around a third of global oil demand. Brent crude futures fell 31 cents, to $73.14/Bbl at 2:25 p.m. ET. This is causing investors to continue to trim net length, take profits as well as de-risk that position with the sense that oil's upside is limited unless there is material reduction in Iranian barrels.

China - the world's top crude buyer and Iran's No. 1 customer - has said previously that it opposed unilateral sanctions and lifted monthly oil imports from the country by 26 percent in July. The kingdom told the cartel it produced 10.489 million in June.

"For Saudi, if the oil hasn't been consumed or left the country, it must have gone into local storage tanks".

China imports more Iranian oil than any other country. "Bloomberg tanker tracking in July shows the country's crude and condensate exports have already fallen by about 430,000 barrels a day, or 15%, from their April peak".

SPA quoted Energy Minister Khalid al-Falih as saying: "The decision to resume shipping of oil through Bab al-Mandeb comes after all necessary procedures were taken by the coalition leadership to protect ships of the coalition countries".

Sukrit Vijayakar, director of energy consultancy Trifecta, said the escalating trade dispute between the United States and China was also holding back crude prices.

Fears that Chinese demand could taper fuelled the pullback on Friday after state oil major Sinopec cut its purchases of U.S. crude.

China has rejected USA requests to cut Iranian oil imports, damaging Washington's efforts to isolate Tehran.

Meanwhile, price of the Brent Crude for October 2018 shipment drops by United States dollars 0.24 to a level of USD 73.21 per barrel at the London ICE Future Exchange. Implied volatility for second-month West Texas Intermediate oil futures jumped to the highest since 2017 last month.

In January-July, India's oil imports from Iran rose by more than 17 percent to about 612,000 bpd, the data showed.

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