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Oil Prices Leap After 3 Days Of Sliding

03 November, 2018, 05:12 | Author: Sara Gill
  • An Iranian warship

New data released on Wednesday from the US Energy Information Administration showed a drop in USA fuel stockpiles, as crude oil inventories rose.

Cohen says Barclays expects a flat performance from oil in 2019 in spite of the geopolitical environment because USA shale production is likely to ramp up, replacing some American demand in the global market with increased supply.

"The market has moved from expectations of massive supply scarcity in the fourth quarter to quite opposite expectations of a looming oversupply", said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. Iran's oil exports fell by about a third in the five months to September, tumbling by about 800,000 barrels per day (bpd), according to CNBC.

Iran was selling roughly 1.7 million to 1.9 million barrels per day (Mmbpd) in September.

The Organization of Petroleum Exporting Countries increased production in October to the highest level since 2016, while Russian Federation was said to raise output to a post-Soviet record.

Beyond Iran sanctions, oil output has been rising significantly in the past two months.

Thursday's drops came after U.S.


Analysts said oil prices were also supported by the upcoming United States sanctions against Iran's crude exports that will start on Nov 4.

Consultancy JBC Energy said the oil price weakness was "probably driven by the wider negative market sentiment amid speculation about additional USA tariffs on Chinese imports, should upcoming talks fail to produce the desired results". One is high oil prices, and in many countries they're directly related to consumer prices.

USA crude oil production exceeded the Russian Ministry of Energy's estimated August production of 11.2 million b/d, making the United States the leading crude oil producer in the world. This means that the country imports more than 10 million barrels every day.

Despite surging output, concerns lingered ahead of the start of U.S. sanctions against Iran's petroleum exports from next week.

From January 2018 to August 2018, Texas crude oil production increased by 683,000 b/d, or 15 percent, and New Mexico production increased by 182,000 b/d, or 25 percent.

Reports said the White House was drafting a trade agreement to be taken up with Beijing during US President Donald Trump and China President Xi Jinping's meeting on the sidelines of the G20 Summit at the end of this month.

Meanwhile, output from top producers Saudi Arabia, Russia and the United States - as well as from OPEC as a whole - has continued to rise.

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