Crude oil prices rose modestly on New York and London markets Aug. 16 while traders and investors remain watchful regarding US-China trade relations even though representatives from the two countries are expected to talk later this month.
Iran could prove troublesome for US-China trade relations. China has said it has no intention of reducing its imports of Iranian crude despite pending US oil sanctions against Iran.
US President Donald Trump wants other countries to reduce crude purchases from Iran. He has suggested secondary sanctions are possible against countries failing to take such action.
Brian Hook, special representative and chief of a newly formed Iran Action Group at the US State Department, said waivers from US sanctions will be granted to countries that reduce their Iranian oil purchases. US officials plan to review such efforts by other countries in early November.
India and South Korea have started to reduce their Iranian crude imports in efforts to obtain US waivers. But Chinese officials say trade with Iran across a range of economic and energy sectors is lawful.
During a State Department briefing with reporters on Aug. 16, Hook stopped short of ruling out secondary sanctions against China.
“The United States certainly hopes for full compliance by all nations in terms of not risking the threat of US secondary sanctions if they continue with those transactions,” Hook said when asked about the Iran Action Group’s plan for dealing with China.
He also said the goal is to reduce every country’s import of Iranian oil to zero by Nov. 4.
“We are prepared to impose secondary sanctions on other governments that continue this sort of trade with Iran,” Hook said.
Energy prices
The light, sweet crude contract for September delivery on the New York Mercantile Exchange gained 45¢ to close at $65.46/bbl on Aug. 16. The October contract increased 42¢ to settle at $64.88/bbl.
The NYMEX natural gas price for September declined 3¢ to a rounded $2.91/MMbtu. The Henry Hub cash gas price decreased 2¢ to $2.99/MMbtu.
Ultralow-sulfur diesel for September edged up less than 1¢ to a rounded $2.10/gal. The NYMEX reformulated gasoline blendstock for September dropped more than 3¢ to a rounded $2/gal.
Brent crude oil for October rose 67¢ to $71.43/bbl on London’s International Commodity Exchange. The November contract increased 65¢ to settle at $71.75/bbl. The gas oil contract for August was $641.75/tonne on Aug. 15, down $5.
The Organization of Petroleum Exporting Countries’ basket of crudes for Aug. 16 was $69.77/bbl, down 30¢.
