Image credit: A/S Global Risk Management

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Since mid-last week when Brent oil price touched $80, Brent has had a hard time staying at that level and is currently trading at $77.84.

Iranian crude production has started to decline, Sources estimate that it has dropped about 300 kbpd during the last 6 months, other analysts estimate that it has dropped 580 kbpd. Furthermore India, the second-largest buyer of Iranian crude, is looking to import less ahead of the sanctions.

Russia, Saudi Arabia and the U.S. are the main producers looking to offset the missing barrels from Iran. U.S. crude exports are expected to rise during 2019 and the Russian-Saudi Arabian cooperation has already proven rather successful since end-2016. Additionally, Brazil's Petrobras just announced that it will strive towards expanding production by 200 kbpd in 2019.

The U.S. stock markets have been declining since Friday, allegedly because the U.S. has announced new $200 billion tariffs on Chinese imports. The 10% tariff could be imposed as soon as the start of next week. U.S. president has announced that if China were to take retaliatory measures he would pursue additional tariffs of $267 billion, which is a further escalation of the current trade war.

Today, the API is releasing the U.S. inventory data which last week showed large draws.