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Oil Prices Gain on U.S. Sanctions on Iran, EIA Report

Thursday,   14-Mar-2019   10:30 AM (IST)

Oil prices trade higher on Thursday in Asia as the U.S. reportedly plans to cut more exports of crude from Iran starting in May. Citing two sources who were briefed by the administration of President Donald Trump on the matter, Reuters reported that Washington is targeting to cut Iran's crude exports by about 20% to below 1 million barrels per day (bpd) from May. "The goal right now is to reduce Iranian oil exports to under 1 million barrels per day," one of the sources said. The cut would be achieved by requiring importing countries to reduce purchases to avoid U.S. sanctions, the source added. A complete halt of Iran’s oil in the short term is unlikely however, as the Trump administration remained concerned that it would trigger a global oil price spike. In other news, the U.S. Energy Information Administration reported that crude oil inventories fell by 3.86 million barrels in the week to March 8 versus forecasts for a stockpile build of 2.66 million. In the previous week, inventories surged by 7.07 million barrels. U.S. crude oil production also dipped, falling by 100,000 bpd to 12 million bpd. Crude bulls were also helped by remarks by U.S. special envoy Elliott Abrams on Wednesday that Washington planned “very significant” further sanctions on Venezuelan oil.