* U.S. sanctions on certain Iranian goods started Tuesday
* U.S. cuts 2018 crude oil production growth forecast
* Global heatwave to lift oil demand -analysts
* U.S. crude, gasoline stockpiles likely down last week -Rtrs poll
* Coming Up: API data on U.S. oil inventories at 4:30 p.m. EDT (Updates prices, adds comment, EIA monthly report)
By Andres Guerra Luz
NEW YORK, Aug 7 (Reuters) - Oil prices rose on Tuesday after U.S. sanctions on Iranian goods went into effect, intensifying concerns that sanctions on Iranian oil, expected in November, could cause supply shortages.
Renewed U.S. sanctions against OPEC member Iran officially went into effect at 12:01 a.m. EDT. The sanctions did not include Iran’s oil exports. The country exported almost 3 million barrels per day (bpd) of crude in July.
The reimposed sanctions target Iran’s U.S. dollar purchases, metals trading, coal, industrial software and its auto sector.
U.S. sanctions on Iran’s energy sector are set to be re-imposed after a 180-day “wind-down period” ending on Nov. 4.
“It certainly is a reminder to everyone that the U.S. is serious about sanctions, and it’s doubtful they will grant waivers,” said John Kilduff, partner at Again Capital Management in New York.
Brent futures rose 90 cents, or more than 1 percent, to $74.65 a barrel by 1:38 p.m. EDT (1738 GMT), after hitting a session high of $74.90. U.S. West Texas Intermediate (WTI) crude futures were up 29 cents at $69.30 a barrel, down from am earlier high of $69.83.
Oil prices rose after the sanctions went into affect, but gains were limited as market participants lacked clear signs on just how much the proposed oil sanctions would affect Iranian crude output, Kilduff said.
U.S. President Donald Trump tweeted that the sanctions were “the most biting sanctions ever imposed”.
“Anyone doing business with Iran will NOT be doing business with the United States,” he added.
Many European countries, China and India, oppose the sanctions, but the U.S. government said it wants as many countries as possible to stop buying Iranian oil.
Iraqi Prime Minister Haider al-Abadi said his country opposes sanctions on Iran, but will abide by them to protect its own interests.
“The market continues to price in geopolitical risk from the reimposition of sanctions by the U.S. on Iran,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut. “The reports that Saudi Arabia’s production actually dropped in July continue to provide support for the market.”
Saudi Arabia’s crude production dropped about 200,000 bpd last month, two sources at the Organization of the Petroleum Exporting Countries said on Friday, despite a pledge by the Saudis and top producer Russia to raise output from July, with Saudi Arabia promising a “measurable” supply boost.
Meanwhile, U.S. crude production, which has climbed dramatically fueled largely by increased output from shale formations, may now rise more slowly as prices drop, according to the U.S. Energy Information Administration’s monthly report.
Output was expected to rise 1.31 million bpd to 10.68 million bpd in 2018, lower than last month’s forecast of growth of 1.44 million bpd to 10.79 million, the EIA said.
“We continue to expect Brent crude oil spot prices to fall towards $70 per barrel by the end of 2018, as the market appears to be fairly balanced in the coming months,” said Linda Capuano, EIA Administrator.
U.S. crude stockpiles were expected to have dropped 3.3 million barrels last week. Weekly data from the American Petroleum Institute for U.S. inventories is due later on Tuesday at 4:30 p.m. EDT, followed by the EIA’s report on Wednesday morning.
The concerns over possible supply disruptions in Iran come at a time when analysts warn that a global heatwave could increase oil demand.
Much of the northern hemisphere has been gripped by extreme heat this summer, pushing up demand for industrial and residential cooling.
This mostly affects demand for power fuels such as thermal coal and natural gas.
“With global demand remaining healthy and the global heatwave increasing oil demand, I think prices will remain well-supported in the near term,” Hussein Sayed, chief market strategist at FXTM, said.
Additional reporting Ahmad Ghaddar in London, by Henning Gloystein in Singapore Editing by Marguerita Choy and Alistair Bell