US oil report seen supporting Iran sanctions

WASHINGTON - The Obama administration is unlikely to pull back from levying sanctions against Iran oil transactions based on a government report due on Friday, which is expected to show crude markets are sufficiently well-supplied to move forward with the penalties.
The report, which the US Energy Information Administration is required to produce every two months under the sanctions law aimed at curbing Tehran's nuclear ambitions, could walk a fine line in assessing the state of markets, according to analysts.
Oil markets have relaxed significantly since earlier this year, when prices reached post-2008 records as European and Asian oil customers cut imports from Iran. Top oil exporter Saudi Arabia has increased supplies, as has fellow OPEC producer Libya, while US domestic output continues to grow.
"I think there is pretty broad consensus in the market relative to two months ago that things are loose right now," said Trevor Houser, a partner at Rhodium Group and a former State Department adviser.
However, some analysts expect the report, which should be released at midday on Friday, to maintain a neutral tone, leaving President Barack Obama sufficient room to authorize a release of emergency oil stockpiles to help cool off gasoline prices, which have become a key issue in the presidential race.
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