Oil Prices Dips on Rising Supply From OPEC; U.S. Sanctions On Iran Remain in Focus

Investing.com – Oil prices dipped on Monday on rising output from OPEC, while looming U.S. sanctions on Iran also remained in focus.

for November delivery fell 0.3% to $77.42 at 12:45AM ET (04:45 GMT), while  for October delivery also lost 0.3% to $69.61. 

Output from the OPEC rose by 220,000 barrels per day between July and August, according to a Reuters Survey.

Data released Friday showed that the U.S. rig count, an early indicator of future output, rose by 2 to 862 last week, according to oilfield services firm Baker Hughes.

Oil traders are likely to stay focused on potential disruptions to global crude supplies in the upcoming week, as looming U.S. sanctions on Iran are widely expected to lead to a tighter market.

The sanctions, which from November will include Tehran’s oil exports, are being reinstated after U.S. President Donald Trump pulled out of the Iran nuclear deal earlier this year.

Iran is the third-biggest producer in the Organization of the Petroleum Exporting Countries (OPEC), supplying around 2.5 million barrels per day (bpd) of crude and condensate to markets this year, equivalent to around 2.5% of global consumption.

Meanwhile, economists are worried that rising trade barriers between the U.S. and China will drag on global growth and, by extension, erode energy demand.

Markets believe the escalating trade dispute between them is likely to become more intense in the coming months. Reports suggested that the Trump administration was prepared to impose tariffs on an additional $200 billion of Chinese goods as soon as this week.

U.S. slapped duties on $34 billion of Chinese goods in July, before imposing a new round of tariffs on a further $16 billion of Chinese products on Aug. 23.    

Trump warned earlier that the U.S. may eventually target the entire $500 billion in Chinese exports to the U.S.    

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