Oil is rising, US crude oil inventories
Oil prices rose on Wednesday and from the last session after industry data showed that US crude oil inventories fell unexpectedly last week, as short-term travel demand recovered with the relaxation of the COVID 19 pandemic containment. It continued to rise strongly.
Brent crude oil futures traded at $ 85.22 a barrel on Tuesday at 0732 GMT, up 44 cents to 1.6%.
West Texas Intermediate crude oil futures rose 16 cents to $ 84.31 per barrel on Tuesday, up 2.7 percent. Both benchmarks reached their highest levels two weeks earlier on Wednesday. It was boosted by tightening global oil inventories in recent months and the latest American Petroleum Institute data, reinforcing the view that supply is still constrained.
API data showed that US crude stocks fell by 2.5 million barrels in the week ending November 5. It defied analysts’ expectations for a 2.1 million increase in oil stocks. Supplies are tight, and OPEC is sticking to its guns, referring to the recent agreement between the OPEC+ maintain 400,000 barrels per day of output growth in December.
Over the last three months, China’s imports of Iranian crude have remained above half a million barrels per day on average. Buyers believe that getting crude at low prices outweighs the risks of violating US sanctions.
Despite the sanctions, Chinese purchases of Iranian crude have continued this year. Washington will cut off those who violate them from the US economy.
So far, President Joe Biden’s administration has decided not to enforce the sanctions against Chinese individuals and companies, despite ongoing talks to resurrect a 2015 nuclear deal that would allow Iran to resume open oil sales. Following a drop in June and July from a record high in May, buyers ran out of import permits. As the government released new quotas, Chinese independent refiners re-embraced Iran’s cheaper crude.
Iranian oil shipments, now worth $1.3 billion per month and destined primarily for China, are a critical source of revenue for Tehran.
Iranian imports into China reached 660,000 BPD in August, 545,000 BPD in September, and 470,000 BPD in October. The three-month average is now 560,000 BPD, up from 478,000 BPD in June and July. Shipments peaked at 730,000 BPD in May, with a year-to-date average of 562,000 BPD through the end of October.
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