Global oil prices have dipped amid expectations of a hike in US crude inventories. However, losses were capped by reports of a fall in Iranian oil exports.
Benchmark brent crude dropped 80 cents per barrel to reach $79.98, while US light crude fell 60 cents to trade at $71.18, Reuters reported.
A Reuters poll indicated that US crude inventories are expected to have risen for the week ending 12 October by about 1.1 million barrels.
As per data available with the US Energy Information Administration (EIA), US oil output has increased steadily over the past five years. The production reached 11.2 million barrels per day in the week to 5 October.
Despite growing production, infrastructure within the Permian basin in the US has not been enhanced proportionately.
BNP Paribas oil strategist Harry Tchilinguirian told Reuters Global Oil Forum: “Once pipelines and oil terminals are built connecting the Permian to the US Gulf Coast, then there will be a big step up in US crude oil exports.”
Meanwhile, reports showed that crude oil exports from Iran are declining faster than expected. The US sanctions targeting the country’s petroleum sector are set to come into force from next month.
The country’s crude exports fell to 1.33 million barrels per day (bpd) in the first two weeks of this month from 1.6 million bpd during the same period last month.
Prior to the withdrawal of the US from the 2015 nuclear deal in May this year, Iranian crude exports stood at 2.5 million bpd for the month of April.
The US special envoy for Iran said on Monday the United States aims to cut Iran’s oil sales to zero.
In a separate development, OPEC Secretary General Mohammad Barkindo urged producers and companies to raise their production capacities and added that global spare oil capacity was shrinking.