Crude oil prices rose in Asia on Friday, with the market looking to see how extra oil being pumped by Saudi Arabia and other Gulf countries fares against expected sharp drops in output from Iran starting this month.
ICE Brent crude oil rose 0.37 percent to US$73.16 a barrel and NYMEX WTI gained 0.05 percent to US$63.72 a barrel
Markets are watching for the U.S. to grant selective waivers to countries such as India to allow them to continue to import crude oil from Iran after sanctions kick in on 4 November. The main issue now for the market is data that indicates that OPEC’s October output is at its highest level since November 2016.
“This surge has driven the market into oversupply; the balancing effect begins on Monday, when the full effects of U.S. economic sanctions hit Iranian exports. We do expect that there will be exemptions granted, but a further contraction of 500,000 barrels per day in Iranian exports seem a reasonable starting point and would bring the market back into balance – and with minimal spare capacity,” brokerage Jefferies said in a note to clients on Friday.