Oil prices were steady on Wednesday as concerns that producers will not be able to respond to a shortfall in supply once US sanctions on Iran are enacted outweighed a gain in stockpiles in the United States, the world's biggest oil user.
Brent crude futures had dropped 29 cents, or 0.37 percent, to $77.76 per barrel by 12.02pm.
USA crude futures (CLc1) were down 6 cents at $69.79, after gaining 1.4 percent the day before.
The U.S. Energy Information Administration said on Monday that the country's oil output from its seven major hale formations is expected to rise by 79,000 per day to 7.6 million bpd next month.
"Saudi Arabia and the UAE are turning OPEC into a tool for the USA and consequently the organization has not much credit left", Iran's OPEC governor Hossein Kazempour Ardebili told the Shana newswire, affiliated to Iran's Oil Ministry.
Iran is a "very important producer and exporter" of oil, the group's Secretary-General Mohammad Barkindo said at an event in the United Arab Emirates city of Fujairah.
USA sanctions affecting Iran's petroleum sector will come into force from November 4 though many buyers have already cut their purchases, raising questions about how the market will make up the lost supply.More news: Kavanaugh willing to testify; accuser wants time
More news: What Are Captain Marvel's Powers? Movie's New Trailer Gives Some Insight
More news: Trump to visit North Carolina as governor urges residents to be patient
Brent may fall more than $1 to $76.37 a barrel, while WTI crude prices may revisit their September 14 low of $67.94, he wrote. According to reports, Iran's crude exports are already falling as the US prepares to curb Tehran's ability to sell oil and participate in global financial markets.
USA stock indexes broadly fell yesterday, weighing on oil futures, on expectations that Trump would go ahead with the new tariffs and that Beijing would retaliate.
On Monday, Russia's Energy Minister Alexander Novak said that OPEC and non-OPEC members will discuss all possible supply scenarios when they meet this month in Algeria.
"The U.S. -China trade tension restricts oil from rising further, while optimism over Saudi and Russian Federation making up for Iran's losses is keeping prices from falling lower", Ahn Yea Ha, a commodities analyst at Kiwoom Securities Co., said by phone from Seoul.
Bloomberg reported on Tuesday, citing unnamed Saudi sources, that the kingdom was now comfortable with prices above $80 per barrel, at least for the short term.
Saudi Arabia has mentioned several times recently that they have no desire to push oil prices over $80/barrel, a move higher may be unavoidable as USA sanctions on Iran are set to come into effect beginning November 4th.
"But there's still a big question mark over China's United States crude purchases, which fell at one point to zero, there's a risk of Chinese tariffs on USA crude oil", Jakob said, which could weigh as U.S. output continues growing.