Published: Fri, October 26, 2018
Markets | By Josh Butler

Oil prices fall as stock markets plunge

Oil prices fall as stock markets plunge

However, U.S. crude oil production has climbed by nearly a third since mid-2016, and the rising output could help to offset the loss of exports from Iran.

Days after India's announcement to continue to buy Iranian crude, US President Donald Trump had said US will take care of countries which defy its directive to stop importing oil from Iran. "We will decide if there are any disruptions from supply, especially with the Iran sanctions looming", Falih said. The International Energy Agency said in a recent report that cutting Iran out of the market could make maintaining global supply "very challenging." Norway's Equinor ASA's kept its focus on continued spending restraint, even as profits jumped to a four-year high.

Brent crude, the global benchmark, has declined more than 7 per cent this month as Saudi Arabia and Russian Federation have boosted supply and American inventories rose.

OPEC and non-OPEC oil producers, which agreed to relax supply curbs in June, may need to change course because of rising inventories and economic uncertainties, according to a ministerial panel's findings released on Thursday.

Saudi Arabia's crude oil exports to India rose 12 per cent to 3.32 MT in September.

On Tuesday, Zangeneh reiterated Iran's position that neither Saudi Arabia nor Russian Federation can replace Iranian oil. Traders are also closely watching how much Iranian oil will be removed from the market when US sanctions hit next month and whether the Organization of Petroleum Exporting Countries and its allies are willing - and able - to fill the gap. The 10-year average level of production was 2.3 million barrels per day.

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In China, some observers have a more subdued opinion on China's capabilities vis-á-vis the United States and its allies. These are mostly ballistic missiles of various ranges, which can carry nuclear warheads to targets around the world.

In 2019, OPEC spare production capacity is expected to fall to 1.3 million barrels per day, from 1.6 million barrels per day in 2018. Meanwhile, Russia suggested its current output is higher than in September.

The U.S. Energy Department said gasoline stocks fell 4.8 million barrels to 229.3 million barrels last week, the lowest since December 2017.

The WTI crude oil continues to trade bullish despite an unexpected rise in crude oil inventories last week.

The uncertainty and volatility in the market prompted an abundance of caution from the first major oil producers to report third-quarter earnings.

Oil prices on Wednesday clawed back a fraction of their hefty losses the day before that came after Saudi Arabia said it would make up for supply disruptions from United States sanctions starting next month on Iran's petroleum exports.

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