US oil slumps on unexpected crude buildup

US oil slumps on unexpected crude buildup

US oil slumps on unexpected crude buildup

But Jahangiri's remarks are indirect acknowledgment that Iran's oil exports have been effectively cut in half from a peak of about 2.5 million barrels a day in April as customers fled in anticipation of the US sanctions. "Saudi Arabia's threat to weaponize oil and use its leverage to bully the USA and destabilize the global economy demonstrates the Faustian bargain we have all been living with for 45 years by being dependent on oil for transportation in a global, mobile economy with little alternative fuel choices", Diamond said.

Traders also continued to assess the tensions between Saudi Arabia and the USA, after speculation grew the de-facto OPEC leader could deploy oil as a weapon against any punitive measures taken by Trump.

"The impact of the inventory-jump weighed on the market and oil seems bearish", said Kaname Gokon, a trader in Japan.

He added that altogether, "the market is spent" and "we're going into a deficit situation where spare capacity is low"; he concluded that oil prices will "be above $90" if any sizeable outages occur in the near future.

"We are seeing a well-supplied and balanced oil market right now. Firm volumes are the ones that oil companies commit to necessarily take and there is an optional volume on top of it which they can dip into if the need arises", a top official at a state-run refiner said.

"We continue to get (Venezuelan oil) but I would say it is lower", Srikanth said.

The EIA data has showed that oil stockpiles have increased last week despite a drop in production due to hurricane Michael.

In the US, a drop in crude inventories as signaled by the API data would be the first decline in four weeks. The global benchmark, which hit a two-week low late last week as equity markets dropped, is trading around $5 below a four-year high of $86.74 reached on October 3.

West Texas Intermediate for November delivery traded 27 cents higher at $72.19 a barrel on the New York Mercantile Exchange at 2:39 Singapore. But the government there is now under fire amid concerns that it might have been responsible for the death of journalist Jamal Khashoggi at the Saudi consulate in Istanbul earlier this month.

Market participants also said USA crude prices were being pressured by recent stock builds at Cushing, Oklahoma, the delivery point for WTI, where inventories have risen for three straight weeks.

Any supply deficit in the fourth quarter was unlikely to be large enough to do more than support prices, they said.

Falih also said Saudi Arabia wants to invest in Indian downstream projects and strategic oil storage. Opec expects investments of $11 trillion globally till 2040 to meet the rising demand.

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