Image credit: A/S Global Risk Management

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Oil prices have gone up the past month - trading just below $80 - as markets anticipate the pressure from U.S. sanctions against Iran. The sanctions, which are expected to take effect from 4 November, have already caused Iran's crude exports to fall by 35 percent since April from 2.8 mbpd to 1.8 mbpd, the month before the sanctions were announced. Oil accounts for nearly 80 percent of Iran's tax revenue, according to the International Monetary Fund, making petroleum the country's economic lifeblood.

Yesterday, the weekly oil inventory report from the Energy Information Administration (EIA) was released, confirming consensus with a draw of 2 mio. barrels, slightly below the expected 2.7 mio. barrels. Distillate stocks increased slightly while gasoline inventories fell by 1.7 mio. barrels. The crude inventory draw did not correlate with Tuesday's weekly API oil stocks data, which showed a crude oil build of 2.6 mio. barrels. It is the fifth week in a row with draws in crude oil stockpiles, which are now around a three-and-a-half-year low.

China said it would impose new tariffs on U.S. goods worth $60 billion with effect from 24 September. The new tariffs are in response to U.S. tariffs on Monday of 10% on $200 billion in Chinese goods, which will go up to 25% at the end of the year. So far, the U.S. has imposed tariffs on $50 billion-worth of Chinese products to pressure the country into making sweeping changes to its trade, technology transfer, and high-tech industrial subsidy policies. China's Yuan currency slipped against the dollar on Tuesday after news of the U.S. measures. It has weakened by about 6.0 percent since mid-June, offsetting the 10 percent tariff rate by a considerable margin.