US crude rises on Gulf of Mexico shut ins

Chart showing historical Iraq and Iran oil production

Chart showing historical Iraq and Iran oil production

The Brent crude oil - the global benchmark for oil prices - was trading at $78.01 per barrel, however, closed trading at $79.38 per barrel.

Money managers raised bets on rising Brent crude prices by the most since 2016 after three weeks of cutting wagers.

USA light crude jumped $1.60 a barrel from Friday's close to a peak of $71.40, its highest since mid-July, before easing to around $70.65 by 1340 GMT.

According to the news report by Reuters, the week started with the price of oil gaining due to concerns that the reduced output from Iran once the United States sanctions kick in are going to tighten the markets.

These sanctions will come into force on November 4, three months after the USA originally reimposed punitive economic measures on Tehran.

Japan has been asking for a waiver from its ally, saying imports of Iranian crude have been recently falling.

China surpassed the become the world's largest crude oil importer in 2017, importing 8.4 million barrels per day (b/d), compared with 7.9 million b/d for the U.S., according to the U.S. Energy Information Administration.

Oil prices have stabilized over the last two years largely thanks to a deal between OPEC and non-OPEC oil producers, including Bahrain and Oman, to curb oil output.

US West Texas Intermediate (WTI) crude futures were at $69.47 per barrel at 0139 GMT, down 40 cents, or 0.6 per cent, from their last settlement.

Oil has averaged more than $70 a barrel this year after the Organization of Petroleum Exporting Countries and its allies curtailed output to eliminate a global glut.

Japan's major oil wholesalers are preparing to suspend crude oil imports from Iran in October, amid fears Washington will sanction countries importing Iranian crude, local media reported.

Iran suffered the biggest drop across the group with a decline of 240,000 barrels a day, pushing its production down to 3.5 million barrels a day.

Azlin Ahmad, editor-crude oil at Argus Media, told CNBC that "Refiners have already started to cut imports of Iranian crude.the volumes are starting to fall, and added to that is the Venezuelan low production, so prices have gone up, [and] I think there is still potential for prices to go a bit higher because we haven't really seen the full impact of the sanctions on Iran".

Japanese refiners, however, are anxious about punitive U.S. measures if they maintain their Iranian oil imports and expecting guidance from the government.

The US dollar was offered for as much as 129,000 rials at 5.40pm Dubai time, according to the greenback's selling price quoted by, which tracks the unofficial currency market of Iran.

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