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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Oil rises amid sanctions, surging crude imports

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SINGAPORE: Oil prices rose on Wednesday as US sanctions on crude exporters Iran and Venezuela as well as ongoing supply cuts by producers have left markets tight just as crude imports to China rose to a record for April.


US West Texas Intermediate (WTI) crude futures were at $61.96 per barrel at 0658 GMT on Wednesday, 56 cents, or 0.9 per cent, above their last settlement.


Brent crude oil futures were at $70.31 per barrel, 43 cents, or 0.6 per cent, above their last close.


With US sanctions on Iran and Venezuela in place, analysts said global oil markets remained tight.


“The tight and price-supportive fundamental outlook has not gone away,” said Ole Hansen, head of commodity strategy at Saxo Bank.


China’s crude oil imports in April rose to a record for the month of 10.64 million barrels per day (bpd), according to data from the Chinese General Administration of Customs released on Wednesday.


That is an 11 per cent rise from the same month last year. The country is the world’s largest oil importer.


China’s imports during the first four months of the year averaged around 10.03 million bpd, up 8.9 per cent from the same period a year earlier, the data showed.


China’s surging oil demand comes as supply is tight.


The United States reimposed sanctions on Iran in November last year, demanding all countries stop importing oil from the country.


Iran has said it will defy the sanctions and continue to export oil. It has also said it stop implementing “some commitments” under a 2015 nuclear deal if it is not allowed to continue exporting oil.


Most analysts expect Iran’s crude export to fall to little more than 500,000 bpd, down from around 1 million bpd in April, as governments largely bow to US pressure.


Washington has also slapped sanctions on Venezuelan oil exports, further disrupting crude supply.


The sanctions come amid already tight supply as the Organization of the Petroleum Exporting Countries (Opec) has been withholding output since the start of the year in order to prop up prices.


US Energy Secretary Rick Perry said that Saudi Arabia, Opec’s de-facto leader, would increase its oil production to meet needs arising from sanctions on Iran. — Reuters


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