Oil climbs to $77 as U.S. drilling stalls, sanctions against Iran looms

Oil prices rose yesterday as U.S. drilling for new production stalled and as the market eyed tighter conditions once Washington’s sanctions against Iran’s crude exports kick in from November.
Brent crude futures climbed to 77.33 dollars a barrel.
U.S.
West Texas Intermediate crude futures were at 68.19 dollars per barrel from their last settlement.
The U.S.
rig count has stagnated since May, after staging a recovery since 2016, which followed a steep slump the previous year amid plummeting crude prices.
Outside the U.S., new U.S.
sanctions against Iran’s crude exports from November were helping push up prices.
Energy consultancy FGE said several major Iran customers like India, Japan and South Korea were already cutting back on Iran crude.
“Governments can talk tough.
They can say they are going to stand up to Trump and/or push for waivers.
But generally the companies we speak to … say they won’t risk it,” FGE said.
“U.S.
financial penalties and the loss of shipping insurance scares everyone,” it said in a note to clients.
With U.S.
rig activity stalling and Iran sanctions looming, the oil market outlook is tightening.
“Investors have largely turned positive again … likely welcoming the return of backwardation,” said Edward Bell, commodity analyst at Emirates NBD bank.