Brent declines amid oversupply concerns

The front-month ICE Brent contract has lost by $0.41/bbl on the day, to trade at $66.38/bbl at 09.00 GMT.

IMAGE: Oil storage tanks. Getty Images

Upward pressure:

Brent crude’s price has found some support due to impending supply concerns in the global oil market.

Canadian Prime Minister Mark Carney has called for the implementation of secondary sanctions on Russia, Bloomberg reported.

The remark came days after the European Commission (EC) proposed its 19th package of economic sanctions against Russia, targeting 118 additional vessels that are allegedly a part of Russia’s shadow fleet.

“This [Carney’s remarks] revived supply concerns, which had eased late last week following an amicable exchange between presidents [Donald] Trump and Xi [Jinping],” said ANZ Bank’s senior commodity strategist Daniel Hynes.

Downward pressure:

Brent’s price has moved lower following news that Iraq has hiked oil exports this month, Reuters reported, citing Iraqi state oil marketer SOMO.

The increase in exports comes as OPEC+ producers continue gradually unwinding voluntary production cuts, deepening market concerns over a looming supply glut.

Earlier this month, eight members of OPEC+ agreed to increase production by 137,000 b/d in October - the sixth consecutive time that they plan to expedite production.

“Iraq is pumping out more barrels now that OPEC+ loosened its grip on quotas,” remarked Price Futures Group’s senior market analyst Phil Flynn.

By Aparupa Mazumder

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