Oil extends declines as Saudi Arabia commits to meet demand

By Henning Gloystein SINGAPORE (Reuters) - Oil prices on Tuesday extended falls from the previous day, when crude slumped as much as 5 percent, after Saudi Arabia said it would make up for supply disruptions from U.S. sanctions targeting Iran's petroleum exports from next month. Front-month Brent crude oil futures were at $76.37 a barrel at 0031 GMT, 7 cents below their last close

Reuters October 24, 2018 07:05:15 IST
Oil extends declines as Saudi Arabia commits to meet demand

Oil extends declines as Saudi Arabia commits to meet demand

By Henning Gloystein

SINGAPORE (Reuters) - Oil prices on Tuesday extended falls from the previous day, when crude slumped as much as 5 percent, after Saudi Arabia said it would make up for supply disruptions from U.S. sanctions targeting Iran's petroleum exports from next month.

Front-month Brent crude oil futures were at $76.37 a barrel at 0031 GMT, 7 cents below their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $66.31 a barrel, 12 cents below their last settlement.

The dips came after Brent closed down 4.3 percent and WTI 4 percent in the previous session.

Saudi Energy Minister Khalid al-Falih said at an investment conference in Riyadh on Tuesday that despite expected supply disruptions from U.S. sanctions against Iran that kick in from Nov. 4, Saudi Arabia would step up to "meet any demand that materialises to ensure customers are satisfied."

"Oil prices fell substantially... as Saudi Arabia released assurances it could supply more to the global market," Australia's Rivkin Securities said.

Beyond the pledge by Saudi Arabia, oil prices are also being weighed down by economic concerns.

South Korea's KOSPI-100 equity index has now fallen by nearly 19 percent over the past year, the fastest rate of decline since the financial crisis of 2008/09.

The KOSPI-100 has correlated closely with the growth in international trade, given the South Korean economy's strong export orientation, so the decline suggests a slowdown in global trade.

In the United States, commercial crude inventories rose by 9.9 million barrels in the week to Oct. 19 to 418.4 million, industry group the American Petroleum Institute said on Tuesday.

Morgan Stanley said "recent trends in refining margins, time spreads and inventories suggest a spell of weakness in oil markets."

Despite this, the U.S. bank said "we still see Brent reaching $85 per barrel by year-end" as Iran sanctions are expected to tighten markets towards the end of the year.

(Reporting by Henning Gloystein; editing by Richard Pullin)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.