Iran says oil price rise offsets U.S. sanctions' impact

OPEC Output Edges Higher

OPEC production rose last month as deepening losses in Iran due to looming US sanctions were countered by other members

Oil headed for the longest run of weekly gains since the start of 2018.

Saudi Arabia is the only oil producer with significant spare capacity on hand to supply the market if a significant amount of oil is affected by sanctions on Iran that kick in on November 4.

Futures climbed as much as 0.9 percent in NY on Friday.

The price of USA crude oil has increased sharply ahead of USA sanctions on Iran and on concerns about Venezuelan output but further strong gains in the immediate future seem unlikely.

Russia and Saudi Arabia are pumping an extra million barrels of crude daily and the Russians could add another 200,000 to 300,000 barrels within a "few months", Energy Minister Alexander Novak said.

Saudi Arabia is juggling intense pressure from U.S. President Donald Trump to boost output and ease high prices.

"This is created in financial markets", he said. "Their demand is picking up because Iran volumes are falling".

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"If we touched upon the topic we are discussing now with him (Trump), I would say, if you want to find the culprit of who's guilty that prices are growing, then you should just have a look in the mirror".

U.S. West Texas Intermediate crude futures ended Thursday's session down $2.08, or 2.7%, at $74.33 a barrel, after hitting $76.90/Bbl Wednesday, the highest level since November 2014.

Brent for December delivery was fetching around $85.30 per barrel in late London business versus $81.50 per barrel at the same time the previous week. The global benchmark crude traded at a $9.75 premium to WTI for the same month.

Asked about surging oil prices, Falih said the current price "was not based on fiscal flows of supply and demand". "It doesn't have to happen immediately, perhaps." he said in a tacit acknowledgement that countries like India might not be able to bring down their oil purchase from Iran to zero. While Goldman Sachs Group Inc. isn't that bullish, the Wall Street bank sees a risk of oil holding above $80 toward the end of the year.

Crude futures steadied on Friday after climbing to four-year highs earlier this week, and both Brent and USA crude marked weekly gains ahead of US sanctions on Iranian oil exports.

Traders said the rising stocks were partly due to a relentless increase in US crude oil production, which has jumped by a third since mid-2016 to a record 11.1 million bpd.

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