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Oil price slides as figures show a surprise build in U.S. stocks

18 October, 2018, 06:32 | Author: Shawna Walton
  • Asia markets

Oil futures finished higher on Tuesday, with global benchmark prices leading the climb as traders waited to see if relations between the USA and Saudi Arabia sour further following the disappearance of a journalist in Turkey.

Global benchmark Brent crude for December delivery rose 9 cents, or 0.1 percent, to $80.87 per barrel, while the U.S. West Texas Intermediate crude for November delivery was up 5 cents at $71.83 a barrel.

Oil prices hit a four-year high of Dollars 86.74 a barrel earlier this month as the market grapples with the expected loss of Iranian exports due to the U.S. sanctions.

As oil prices hit $80 per barrel in recent months and with global oil inventories shrinking fast, Saudi Arabia and Russian Federation agreed to ease restrictions although they never said the exact levels they would target.

USA crude inventories fell by 2.1 million barrels last week, compared with analyst expectations for a build of 2.2 million barrels, American Petroleum Institute data showed after Tuesday's settlement.

Saudi Arabia stands committed to meeting all of India's energy needs, especially in oil, its Energy Minister Khalid A. Al-Falih said on Monday. USA crude was down 5 cents at $71.29.

The threats came in response to growing global and USA outrage with the killing of dissident journalist Jamal Khashoggi in the kingdom's consulate in Turkey, and Riyadh's now admitted role in his disappearance, the Saudi government issued a strong statement warning other nations against imposing penalties. "Big oil producing countries are going off the market under US sanctions and that has led to turmoil".

Meanwhile, new figures are out for US oil inventories. “That's easing most concerns that Saudi Arabia could use its oil exports as a weapon against potential foreign sanctions, though that risk was limited under any scenario.”.

The United States announced new sanctions after withdrawing from a nuclear deal with Iran in May.

He noted that US President Donald Trump thinks that he can decrease oil prices through bullying oil producers, and said the shortage in the crude market will not disappear by words.

"The oil that Saudi Arabia presented to the market recently was not its excessive production but was its past reserves", Zanganeh disclosed.

Gasoline stocks dropped by 2m barrels the EIA data also showed.

"Market watchers are reminding us that the Kingdom has the ability to send oil prices to $150 to $200-even if it is not acted upon, the fact that Saudi Arabia's threat is credible should be sounding alarm bells in Washington that our oil dependence continues to constrain our foreign policy and undermine our economic sovereignty".

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