Oil prices slump after large increase in U.S

Muriel Colon
October 18, 2018

In the US, a drop in crude inventories as signaled by the API data would be the first decline in four weeks.

Kardor said Iran did not have any difficulties receiving payments for oil exports and said the Islamic Republic could accept payments in euros instead of dollars if necessary.

India's Reliance Industries Ltd (RELI.NS), owner of the world's biggest refining complex, has halted imports of Iranian crude ahead of USA sanctions against Tehran's oil sector, its joint chief financial officer said.

'You cannot keep the price low with slogans and intimidation, ' considered Zanganeh.

While Trump has repeatedly demanded that OPEC takes action to lower oil prices, he referred to Saudi Arabia as its ally and reiterated to reporters on Wednesday that Crown Prince Mohammed bin Salman's government agreed to buy $110 billion in US weaponry past year. Such a move would roil markets, as the Saudis have not used oil as a policy weapon since the oil embargo of the early 1970s, and the market is already anticipating reduced supply when sanctions on Iranian oil exports resume on November 4.

"Once pipelines and oil terminals are built connecting the Permian to the U.S. Gulf Coast, then there will be a big step up in U.S. crude oil exports", Harry Tchilinguirian, oil strategist at French bank BNP Paribas told Reuters Global Oil Forum.

Asked whether India has sought waiver from the United States related to Iranian oil imports as Indian oil firms have booked Iranian oil cargo for November, he said "sentiment" rather than availability is the issue.

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

Crude bumped higher this year as uncertainties persisted over whether the Organization of Petroleum Exporting Countries and its partners can offset potential supply losses from US sanctions on Iran that kick in early next month.

Natural gas markets went back and forth during the trading session as well, as we continue to see a lot of volatility.

Since the oil embargo of the 1970s, Saudi Arabia has avoided threats to use its "oil weapon" in diplomatic affairs, insisting that it favors stable markets and separates oil and politics. Iran has exported 1.33 million barrels per day (bpd) to a few countries including India and China in the first two weeks of October, according to Refinitiv Eikon data.

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

Oil prices continued to fall yesterday after USA crude inventories rose more than expected. It could enter into the oil world if the Saudi's are forced to retaliate by pulling crude from the market.

Western pressure mounted on Riyadh to provide answers, but comments by President Donald Trump suggested the White House may not take additional action against the Saudis, particularly after Saudi Arabia said it will conduct an investigation.

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