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Oil Prices Rise As Washington Announces New Iran Sanctions

Oil prices rallied last week, with WTI around $85/B and Brent around $100/B, buoyed by concerns over Iran and an announcement by the White House that new sanctions would be introduced against Tehran (see page 12). European Union sanctions banning Iranian crude imports were introduced on 1 July. Underlying fundamentals remain slack, though, with the EU�s sovereign debt malaise and faltering Chinese data dampening economic prospects.

In its Weekly Petroleum Status Report , released on 11 July, the US Energy Information Administration (EIA) said US commercial crude oil inventories decreased by 4.7mn barrels during the week ending 6 July. At 378.2mn barrels, US crude oil inventories are above the upper limit of the average range for this time of year. Total motor gasoline inventories increased by 2.8mn barrels and are at the lower limit of the average range. Distillate fuel inventories increased by 3.1mn barrels and are below the lower limit of the average range for this time of year. Total commercial petroleum inventories increased by 3.0mn barrels.

US crude oil imports averaged 8.6mn b/d, down by 148,000 b/d from the previous week. Over the last four weeks, crude oil imports have averaged nearly 9.0mn b/d, 229,000 b/d below the same four-week period last year. US crude oil refinery inputs averaged about 15.8mn b/d during the week, 143,000 b/d above the previous week�s average. Total products supplied over the last four-week period have averaged nearly 19.0mn b/d, up by 0.2% compared to the similar period last year.

Settlement Prices For Benchmark Crudes ($/B)

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