The United States won't be able to bring Iranian oil exports to zero because the other producers can't offset the loss of all of Iran's oil barrels in an already tight market, Iran's OPEC governor Hossein Kazempour Ardebili told Reuters on Friday.
Meanwhile, Storm Isaac, a second hurricane hurtling across the mid-Atlantic, could pose an even bigger threat to oil supplies if it makes landfall on the Gulf of Mexico - a main hub for U.S. refinery and production. Washington is pushing allies to cut imports of Iranian oil to zero and will introduce a new round of sanctions on Iranian oil sales on 5 November.
Weaker-than-expected U.S. Producer Inflation and Consumer Inflation reports also drove traders into gold, however, gains were limited by rising U.S. Treasury yields ahead of a widely expected Fed rate hike later this week.
Although the EIA does not publish crude production forecasts for Russia and Saudi Arabia in its short term outlook, it expects that US output will continue to exceed Russian and Saudi production for the remaining months of 2018 and through 2019. Early in the week, a weaker U.S. Dollar drove the market higher due to increased demand for dollar-denominated assets.
In a move heavily opposed by Iran, OPEC and other oil producers including Russian Federation agreed in June to boost crude output by around a million barrels a day, reversing course after supply cuts that had cleared a global glut and boosted prices. The first row of new sanctions against Iran were put in place in August, while more hard-hitting sanctions against the country's energy sector will take effect on November 4.
Florence causing flooding but storm weakening, set for downgrade on Saturday - NHC
His remarks fell flat in Puerto Rico where islanders are continuing to struggle to recover a year after the Category 4 storm. Hurricane warnings are in effect for the South Santee River in SC to Duck, North Carolina, and Albemarle and Pamlico sounds.
The more pressing issue is the fact that Iran's exports are falling faster than most analysts had anticipated.
In July, Iran's oil minister reported that Saudi Arabia had pumped 10.489 million barrels per day in June, up 459,000 from May and above its target of just over 10 million bpd.
In theory Saudi Arabia could immediately raise output to 11.5 million barrels a day-that's what Crown Prince Mohammed bin Salman told Bloomberg in April 2016. Despite the rise, oils prices fell again on Thursday.
USA crude oil production is expected to rise by 840,000 bpd to 11.5 million bpd next year, lower than a previous expectation to increase 1.02 million bpd to 11.7 million.
Novak also said that sanctions on Iran brings "huge uncertainty on the market - how the countries, which buy nearly 2 million bpd of Iranian oil will act".