Oil rises on concerns about supplies because of Saudi-Iranian tensions

January 4, 2016 17:58

LONDON (Reuters) - Oil prices rose on Monday after paying the severance of diplomatic relations between Saudi Arabia and Iran some to speculate on the possibility that this would lead to restriction of supply but the gains had been pressured by the data showed that some of the big economies in Asia are facing difficulties.
Saudi Arabia and severed the largest oil exporter in the world of diplomatic relations with Iran on Sunday in response to the storming of its embassy in Tehran, Riyadh after the execution of a prominent Shiite cleric on Saturday.
And increased crude futures for Brent global measurement in the latest move 72 cents from the previous close to $ 38 a barrel 1323 GMT, down from highs during the session at $ 38.50.
Futures rose to US crude West Texas Intermediate 29 cents to $ 37.33 a barrel.
Iran plans to increase its production by half a million to a million barrels per day after the lifting of the sanctions despite the fact that Iranian officials have said Tehran has no plans to flood the market Boukhamha if there is no demand for it.
And it landed Iran's exports of crude to nearly one million barrels per day, compared to about three million barrels per day in 2011 before the imposition of sanctions.
But the rise of oil price achieved earlier faded after data showed Chinese factory activity contraction for the tenth month in a row which led to the decline in the Chinese stock markets seven percent and the suspension of trading.
As shrank for the first time in two years, the volume of activity the manufacturing sector in India, which expects the International Energy Agency have to lead oil demand growth this year.
Jasper said Lawler, an analyst at CMC Markets "Iran may decide to take a tougher stance in the face of reduced production, led by Saudi Arabia's policy. Now they Eetmasheun to them is that this renewed political movement may cause them to change a little bit."
Oil prices are still low by about two-thirds since the mid-2014 because of oversupply, where pumped producers including the Organization of the Petroleum Exporting Countries (OPEC) and Russia and the United States between 0.5 million and one million barrels of oil per day above the level of demand.