Iranian official warns of oil going above $100

Iranian official warns of oil going above $100

Saudi Arabia will not rush to boost oil supply to make up for a loss of Iranian crude due to USA sanctions, and will stick to a global deal on oil production, which could be extended to the end of 2019, Energy Minister Khalid Al Falih told RIA news agency.

The Trump administration last week announced it would not extend waivers of usa sanctions for countries buying Iranian oil after May 2, in a bid to cut off all foreign sales of the Islamic Republic's key export. Saudi Arabia expects its budget deficit to narrow to 4.2 percent of gross domestic product this year from 4.6 percent in 2018, a target economists say hinges on higher oil prices.

Brent crude futures had risen to $73.08 per barrel by 1143 GMT, up 1.44 per cent from their last close.

Oil prices rose on concerns of a tighter oil market.

Another continues to be rising production in the USA, and a third could be the certainty that Iran will still find a way to ship its oil overseas despite the end of the sanction waivers.

US President Donald Trump over the weekend renewed calls for Saudi Arabia and OPEC to pump more crude.

The rally in oil prices gained momentum in April after Trump tightened sanctions against Iran by ending exemptions previously granted to eight major buyers.

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U.S. crude production fell to 11.68 million barrels per day (bpd) in February, down from 11.87 million (bpd) January, the U.S. Energy Information Administration said on Tuesday. But much of the profusion in supply, led by the United States, Saudi Arabia and Russian Federation, is in lighter grades.

"We will look at (global oil) inventories - are they higher or lower than the normal level and we will adjust the production level accordingly".

Analysts and market participants downplayed the comments as details were unclear.

Saudi Energy Minister Khalid Al-Falih said last week that the world's biggest oil exporter will cater to customers' needs, but doesn't see the need for an immediate response to the Iran situation.

However, Pompeo did not make any commitment and told Swaraj the matter was no longer handled at his level as a decision had been made by the USA administration to strictly enforce sanctions, the people added.

There has been wide speculations as to what approach India will take, with plenty of op-eds claiming that they will stand in defiance of the United States and plenty claiming just the opposite, that they will fill in the Iranian oil gap with crude oil supply from other oil-producing nations.

The end of waivers won't have any significant impact either on Iranian exports, or the global crude market in general, according to Petr Pushkarev, chief analyst at TeleTrade.

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