Published: Mon, October 29, 2018
Business | By Eloise Houston

India's crude oil imports from Iran jumped 10pct in September 2018

India's crude oil imports from Iran jumped 10pct in September 2018

The global benchmark is heading for a weekly loss of 4.2 percent.

In Friday trading, Brent crude was priced below US$77 with West Texas Intermediate (WTI) holding above US$66 a barrel. Faltering confidence in the strength of the global economy comes as swelling American oil stockpiles spark fears about a re-emergence of a price-killing glut. The equities rout is highlighting uncertainty over the global economy, there are growing concerns about the strength of oil demand and crude inventories in the U.S. are rising. West Texas Intermediate, the USA benchmark, traded at $66.77 per barrel, or 0.7 percent lower. However, there has also been new concern among market players: that global economic growth may be slowing down and will continue to slow down, ultimately hurting oil demand.

But, given the bullish outlook for crude after the Iran oil export sanctions become effective, auto fuel will again jump higher in price, which for 9 consecutive days has seen a fall in some of the major Indian cities.

India earlier had declined to bow to USA pressure to cease buying from Iran, but now the Indian government has chose to cut imports from Iran to zero.

Supporting the bearish mood was a report that showed rising inventories at Cushing, Oklahoma, the delivery hub for US crude futures. "Based on market fundamentals, there is absolutely no reason oil prices should be at this level", said Ali Moshiri, chairman of Amos Global Energy LLC, a Houston-based oil producer and a longtime Chevron Corp. executive.

The global equities slide is seeing oil helped along the bearish path as investors flee riskier assets across the board.

New concerns about an oversupplied market were raised on Thursday when Saudi Arabia's OPEC governor said that the oil market could face oversupply in the current quarter.

US crude production is soaring, boosted by technological advances. Cumulatively the value of oil imports from Iran between April and September 2018 more than doubled to Dollars 7.74 billion from USD 3.84 billion in the corresponding period a year ago.

U.S. crude barrels have been steadily declining for almost four weeks, peaking at 77.00 in early October and tumbling steadily into 66.20, and WTI barrel prices are trading below the 200-day moving average, now sitting near 67.50, for the first time since September of 2017.

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