Rouhani first deputy: USA can not stop export of Iranian oil

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Phil Streible, senior market strategist at RJO Futures, told Bloomberg television that, "One would expect with the Dow Jones up over 200 points we would expect oil prices to rebound; the fact they haven't really tells you two different things are going on, one there's been a sector rotation out of the oil market and oil looks to continue its path lower".

Brent crude oil futures were down 8 cents, to $77.54/Bbl at 1:38 p.m. ET, dropping roughly 6.3% this month, and threatening to post the worst decline also since July 2016. Now, selling dollars from the oil income at a much higher rate on the local market, gives the government so much more rials to take care of its domestic operating expenses.

US West Texas Intermediate (WTI) crude futures were at $67.59 a barrel, flat from their last settlement.

It is still not known if this level of oil export would be enough for the Iranian government to run its day to day operations, feed the nation and provide for health, education and other necessities. Moreover, in a sign of things to come, hedge-fund and money managers are trimming their bets that crude oil prices will rise.

USA supply data also showed a sixth straight weekly rise in domestic crude inventories. In spot markets -like all other oil markets- the payments are carried out through United States dollar and local companies have no choice but bring cash dollars back into the country or convert them to other currencies and deposit into the NIOC's bank accounts inside or outside of the country.

Oil market headwinds, perhaps even storm clouds are brewing over a slowdown in economic growth due to trade war tensions between Washington and Beijing, and a stronger dollar weighing on emerging market economies, with those countries seeing an exodus of currency for higher yielding, safer havens like the US Dollar and Japanese Yen.

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In North America, however, there is no oil shortage as USA crude oil production C-OUT-T-EIA has increased by nearly a third since mid-2016 to around 11 million barrels per day. [USD/] A stronger dollar makes greenback-denominated commodities more expensive for holders of other currencies.

In an effort to counter US sanctions on its oil exports, Iran offered its first oil cargo in Tehran's energy stock exchange to "private companies".

Saudi Arabia's OPEC governor said on Thursday the market could face oversupply in the current quarter, and after a slump in global equities clouded the outlook for demand.

Oil market prospects look dim for Iran as the U.S. sanctions to be implemented in November are planned to target the government's lifeline, namely the country's oil export, and the worldwide banking operations vital for repatriating oil revenues.

Amid these developments, Tehran has toned down then eliminated its defiant insistence that oil markets were headed for trouble with the loss of Iranian barrels.

"We are determined to implement our policy of maximum pressure on Iran".

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