Oil prices fall ahead of U.S. crude stocks data
GENEVA (Reuters) - Statements by the United States that it would reduce Iran’s oil exports to zero are a “political bluff”, the head of state-run National Iranian Oil Company (NIOC) said, according to a report published by Tasnim news agency on Wednesday.
Iran’s Foreign Ministry also criticized U.S. sanctions imposed on Tuesday on several Iranian banks and other companies, saying they were part of Washington’s psychological war, state-run IRNA news agency reported.
U.S. officials have said they aim to cut Iran’s oil exports to zero to force its leaders to change their behavior in the region. U.S. sanctions on Iran’s oil exports are scheduled to kick in on Nov. 4.
NIOC head Ali KarLONDON (Reuters) - Oil prices slipped on Wednesday after three days of gains as markets awaited key U.S. inventory data expected to show a build in U.S. crude stockpiles.
Brent crude LCOc1 was down 25 cents at $81.16 a barrel by 1205 GMT, after gaining $1.15 over the previous three sessions. The benchmark, which hit a two-week low last week as equity markets dropped, is trading around $5 below a four-year high of $86.74 reached on Oct. 3.
U.S. light crude oil CLc1 was 35 cents lower at $71.57.
Official oil inventory data from the U.S. Energy Department’s Energy Information Administration was due to be published at 1430 GMT on Wednesday. [EIA/S]
A Reuters survey of eight analysts estimated crude stocks rose by about 2.2 million barrels last week.
On Tuesday, the American Petroleum Institute reported that U.S. crude inventories fell by 2.1 million barrels in the week to Oct. 12 to 408.5 million, surprising the market. [API/S]
“Oil prices are retreating from the early morning strength as bulls are taking profit ahead of the EIA stats,” said Tamas Varga, an analyst at London brokerage PVM Oil.
“It is quite probable that higher numbers will be the order of the afternoon should U.S. commercial oil inventories fall.”
Also underpinning sentiment was the scandal over the disappearance of prominent Saudi critic and journalist Jamal Khashoggi, who disappeared two weeks ago after entering the Saudi consulate in Istanbul.
U.S. President Donald Trump gave Saudi Arabia the benefit of the doubt in the case even as U.S. lawmakers pointed the finger at the Saudi leadership and Western pressure mounted on Riyadh to provide answers.
Saudi Arabia has said it will conduct an investigation into the disappearance, U.S. Secretary of State Mike Pompeo said before departing the kingdom for Turkey.
Investors are concerned that Saudi Arabia could use oil supply to retaliate against its critics.
Jim Ritterbusch, president of Ritterbusch and Associates, said Saudi Arabia could cut as much as 500,000 barrels per day of crude production “as a warning shot should the U.S. opt to impose any type of sanction in response to the Khashoggi developments”.
A claim by the United States that it aims to reduce Iran’s oil exports to zero is a “political bluff”, the head of the state-run National Iranian Oil Company was quoted as saying on Wednesday.
New U.S. sanctions on Iranian oil exports start on Nov. 4, while Iran has accused Saudi Arabia and Russia of breaking an OPEC-led agreement on output cuts by producing more crude.
dor said U.S. President Donald Trump had been trying to reduce Iran’s oil exports for months.
“The president of America has done whatever he can and he knows very well that getting Iran’s oil exports to zero was a political bluff,” Kardor said.
The U.S. administration has been pushing its allies to cut Iranian oil imports and encouraging Saudi Arabia, other OPEC states and Russia to pump more oil to meet any shortfall.
Kardor said Iran did not have any difficulties receiving payments for oil exports and said the Islamic Republic could accept payments in euros instead of dollars if necessary.
“There is no problem on this issue,” Kardor said, Iran’s ISNA news agency reported. “With European support there will not be a problem.”
European powers have been trying to salvage a nuclear accord with Iran after the United States withdrew in May.
The European Union said last month it was considering setting up a Special Purpose Vehicle (SPV) to facilitate trade with Iran and said it could be in place before November.
European diplomats have said the SPV would create a barter system, similar to one used by the Soviet Union during the Cold War, to exchange Iranian oil for European goods without money changing hands.
Kardor said Iran was scheduled to sign a new oil contract with a foreign company within two weeks, ISNA reported. He did not provide any additional information.
Iran’s Foreign Ministry said Washington was involved in a pscyhological war by imposing sanctions on Tuesday on Bank Mellat, Mehr Eqtesad Bank and a handful of other companies allegedly linked to Iran’s Basij militia, IRNA reported.
“This action shows the spitefulness of the government of America toward the Iranian people and is a clear insult to legal and international mechanisms,” ministry spokesman Bahram Qassemi said.
Reporting by Babak Dehghanpisheh; Editing by Louise Heavens and Edmund Blair
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