US, 2 Others crash oil prices

Oil prices fall on signs of rising supplies

Oil prices fall on signs of rising supplies

The Brent crude December LCOc1 futures contract, which expired Wednesday, fell 44 cents to settle at $75.47 a barrel.

Brent has fallen by over 12 percent since the beginning of October, while WTI has lost more than 13 percent in value.

News of talks between Saudi Arabia and Kuwait to resume production in Partitioned Neutral Zone, whose output was around 500000 to 600000 BPD before it was closed, ended without any resolution drove crude oil price to weekly lows.

Imports of Iranian crude by major buyers in Asia hit a 32-month low in September as China, South Korea and Japan sharply cut their purchases ahead of the sanctions, government and ship-tracking data showed. Saudi Arabia and Russian Federation have said they will pump enough to meet demand once U.S. sanctions are imposed.

To the extent that interest rate changes would be inappropriate if not for the inflation generated by rising oil prices, then the adverse economic impact coming from the oil market could be twofold in some countries.

"The market's reaction isn't strongly negative because the USA administration hasn't actually gone soft on Iran", said Harry Tchilinguirian, head of commodity-markets strategy at BNP Paribas SA. In 2017, the country consumed more than 19 million barrels of crude oil every day.

On Sunday, sanctions against Iran exports are scheduled to go back into effect.

On Thursday, oil prices rose as investors were encouraged by a strong rebound in the US stock markets. Analysts now believe that surging output from the world's three largest producers outweighed supply concerns from the start of USA sanctions against Iran's petroleum exports which is expected to become active this weekend. Also weighing on the outlook for oil are fears of a slowdown in global, growth, particularly in emerging markets, which would likely mean weaker demand for the valuable commodity. WTI picked up 0.26 dollar to settle at 67.59 dollars a barrel.

The United States has 875 operating oil drilling rigs in this week, adding two more from the previous week, according to data issued by oil service company Baker Hughes on Friday.

Anticipating a fall in global supply, the Organization of the Petroleum Exporting Countries raised production by 400,000 barrels per day to 33.31 mln bpd in October, the highest since 2016, led by Saudi Arabia, the United Arab Emirates, and Libya, a report by Reuters said.

Oil was also being weighed down by signs of rising supply from top producers.

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.