US oil prices surge as inventory draw adds to supply concerns

US oil prices surge as inventory draw adds to supply concerns

US oil prices surge as inventory draw adds to supply concerns

Lipow Oil Associates President Andy Lipow on how Hurricane Florence has impacted the USA oil industry.

Crude Oil WTI Futures for November delivery dropped 0.45% to $68.37 a barrel at 10:47PM ET (02:47 GMT), while Brent Oil Futures for November delivery also went down 0.63% to $77.56 per barrel.

Brent crude on Tuesday jumped 2 percent to an intraday high of $79.73 a barrel, after touching $80.13 a barrel earlier this month.

With almost 50 days to go before new U.S. oil sanctions against Iran enter into force, U.S. President Donald Trump has already managed to crush the country's petroleum exports, dealing severe economic damage to Tehran.

Ministers from OPEC and non-OPEC producers meet this coming Sunday to discuss compliance with output policies.

Bloomberg reported on Tuesday, citing unnamed Saudi sources, that the kingdom was now comfortable with prices above $80 per barrel, at least for the short term.

According to reports, Iran's crude exports are already falling as the USA prepares to curb Tehran's ability to sell oil and participate in global financial markets.

Stockpiles of distillate fuels, which include diesel and heating oil, rose by 1.5 million barrels, the API data showed, compared with expectations for a 651,000-barrel gain.


Oil eased on Wednesday, but held near its highest level this year, as concerns that producers may fail to cover a supply shortfall once U.S. sanctions on Iran come into force outweighed an increase in United States inventories.

Bloomberg reported on Tuesday, citing unnamed Saudi sources, that the kingdom was now comfortable with prices above US$80 per barrel, at least for the short term.

Official inventory data from the US Energy Information Administration will be released on Wednesday.

Russian Energy Minister Alexander Novak said an oil price between $70 and $80 was temporary and sanctions-driven, adding the long-term price would stand around $50 a barrel.

Russian Federation has told Israel it will take all necessary measures to protect its military personnel in Syria, the Foreign Ministry in Moscow said.

Refineries in the USA consumed about 17.7-million barrels a day of crude oil last week while China's refiners used about 11.8-million barrels a day in August, according to government data from the countries, the most among the world's countries.

The longer-term outlook remains weighed down, however, by an escalation in the China-U.S. trade war that has clouded the outlook for crude demand.

The potential for a full-blown trade war between the US and China could also undercut demand by reducing economic growth globally.

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