Iranian rial hits record low against dollar on mounting economic woes

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A pump jack operates at sunset in an oil field in Midland, Texas U.S. August 22, 2018.

Oil prices fell on Thursday as emerging market woes weighed on sentiment, while a deadline neared for a potential new round of US tariffs on another $200 billion of Chinese goods.

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.

Brent crude, the global benchmark, was up 0.58% to $78.09 a barrel on London's Intercontinental Exchange. The contract gained 1.6 percent last week.

Sushma Swaraj, External affairs minister had said that "India follows only United Nations sanctions and not unilateral sanctions by any country" days after President Donald Trump pulled out of the Iran deal.

Industry chiefs have warned prices will rise as Iranian oil is cheaper and the suspension will increase the distributors' costs.

Nearly immediately, the USA began reimposing sanctions against Tehran. The country produced an average of 11.21 MMbopd in August, according to data emailed Sunday by the Russian Energy Ministry's CDU-TEK unit.

The producer cartel of the Organization of the Petroleum Exporting Countries (OPEC) said on Wednesday that it expected global oil demand to break through 100 million barrels per day for the first time later this year.

Even though sanctions don't officially take effect until November, Iran is already seeing customers flee as the USA imposes penalties on buyers after Trump quit a 2015 nuclear accord with the country.

Oil prices rose after the evacuation of two Gulf of Mexico oil platforms in preparation for a hurricane.

The Saudi-led coalition fighting in Yemen said on Monday it had intercepted and destroyed a ballistic missile fired at the southern Saudi city of Jizan by the Iranian-aligned Houthis, who said separately they were targeting a Saudi Aramco facility.

The world's top oil buyers are discovering that U.S. sanctions on Iran will squeeze their trade flows whether they agree with America or not.

Backwardation describes a forward curve 0#LCO: in which prices for immediate delivery are higher than those for dispatch later on.

According to Stephen Innes, Asia-Pacific brokerage OANDA's head of trading, the Brent crude oil benchmark's price rise has been supported by the expectation that the upcoming United States sanctions are going to lead to constrained markets across the globe.

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