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Oil falls below $80 on rising USA stockpiles

22 October, 2018, 13:22 | Author: Kristi Dunn
  • A general view of the 4th Iranian Petroleum and Energy Club Congress & Exhibition held in Tehran on Oct. 16 2018

The most-active December Brent crude futures contract was last up 23 cents at $81.02 a barrel at 1407 GMT, off the high for the day at $81.90 but still within sight of Tuesday's four-year high of $82.55.

Reports say Iran had previously stored oil at Dalian during the last round of sanctions in 2014 that was later sold to buyers in South Korea and India.

But spare capacity remains at “precariously low” levels and could remain below 1 million barrels a day through the fourth quarter, depending on the effectiveness of USA sanctions on Iranian crude and refined export products, he said.

During an energy conference on October 3 in Moscow, Saudi Arabia energy minister Khalid Al-Falih revealed that his country is producing 10.7 million barrels of oil a day - a rate that is near the country's output record set almost two years ago.

Oil prices and calendar spreads have softened significantly this month as traders became more confident about the availability of supplies towards the end of the year and into early 2019.

"We need to see signs loss of Iranian barrels will be replaced by other producers", said Gene McGillian, vice president of market research for Tradition Energy in Stamford, Connecticut.

Oil traded near the lowest level in a month after a bigger-than-expected gain in American stockpiles overshadowed tensions between the USA and Saudi Arabia over a missing critic of the kingdom.

Arsenal should make Ramsey captain, not let him leave, says Wilshere
I want every player to stay OK, with the mentality to prepare, to play and be together to win. "He's a great guy to have around". One name that has cropped up rather predictably is Arsenal's soon-to-be-out-of-contract midfielder Aaron Ramsey .

Western pressure mounted on Riyadh to provide answers, but comments by President Donald Trump suggested that White House may not take additional actions against the Saudis, specifically after Saudi Arabia said it will conduct a probe.

While Trump has repeatedly demanded that OPEC take action to lower oil prices, he referred to Saudi Arabia as its ally and reiterated to reporters on Wednesday that Crown Prince Mohammed bin Salman's government agreed to buy $110 billion in USA weaponry past year.

According to US State Department officials, "there are no blanket waivers that will be issued for any one country", and any waiver under CAATSA "would require, among other things, countries to significantly reduce their reliance on Russian arms". us crude was down 64 cents at $69.11.

There is no way to wield the oil weapon, which would not shake the foundations of the U.S. -Saudi alliance on which the kingdom's defense depends, leaving it vulnerable to regional rivals, including Iran. Saudi Aramco will buy a stake in an upcoming Chinese mega refinery, its latest investment in the world's biggest oil market as it pursues a strategy of securing avenues for oil sales.

The oil weapon does not work, which is why Saudi Arabia is unlikely to employ it in the dispute over the disappearance of Washington Post journalist Jamal Khashoggi.

In this context, the production cuts and embargo made an already tight market worse, sent oil prices surging, and produced a huge, short-term revenue windfall for Saudi Arabia and other oil producers.



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