Oil prices fell as a result of a decline in Saudi equity and supply guarantees

New York (ANTARA News) – Oil prices have dropped from around 5% to a two-month low on Tuesday at the end of the negotiations, while a mbadive sell-off in global stock markets has sparked fears as to the growth of demand.

Oil prices also fell after Saudi Arabia said it could provide more crude oil quickly when needed, thereby reducing fears related to US sanctions against Iran.

Brent for December delivery sank at $ 3.39, or 4.3%, to settle at $ 76.44 a barrel on the London ICE Futures Exchange, after plunging 5.0% to 75%. , $ 88, the lowest level since September 7.

At the same time, quoted by Reuters, the US crude West Texas Intermediate (WTI) for delivery in December closed the session at 66.43 dollars a barrel on the New York Mercantile Exchange, down 2.93 US dollars, after a fall of 5.2% to 65.74 US dollars, the lowest level since August 20th.

If the US crude falls below $ 65 a barrel, the psychological numbers are important, it could trigger new technical sales, traders said.

Both contracts recorded the largest percentage decline since July. After trading, prices increase losses as data from the American Petroleum Institute (API) show a sharp increase in crude oil inventories in the United States.

"The downfall is striking, but in global trade we're getting a little more often these days, so we have to wait to see if this continues to get out of hand," said Gene McGillian, Vice President of Studies. market at Tradition Energy. in Stamford, Connecticut.

The oil follows the initial sale to Wall Street, concerns about corporate profit growth and the Italian budget have pushed investors to pull out of the stock market lately.

The MSCI index, whose share size worldwide fell more than 2%, hit its lowest level since September 2017.

"Concerns about the stock market situation and economic growth have spread to the oil market," McGillian said, adding that investors would be watching closely to see if the surge in Saudi output was coming fast.

Saudi Energy Minister Khalid al-Falih said at a conference in Riyadh that the oil market was "in a good position", and he expressed hope that the oil producers would sign an agreement in December to extend their cooperation to monitor and stabilize the market.

"We will decide whether there is any interference from suppliers, especially when Iranian sanctions are coming closer and closer," Falih said. "We will then continue with the current state of mind, which is to respond to all requests to ensure customer satisfaction."

Falih said it would not rule out the possibility that Saudi Arabia will produce between 1 and 2 million barrels a day (bpd) more than the current level in the future.

US sanctions on Iranian oil began Nov. 4 and Washington said it would stop all Tehran's fuel exports, but other oil producers are producing more to fill the supply gap.

The oil market fears that Saudi Arabia will reduce its crude oil reserves in retaliation for possible sanctions for the murder of journalist Jamal Khashoggi. Falih said Monday (10/22) that there was no intention to do so.

Peter Kiernan, Energy Analyst of the Economist Intelligence Unit, said that Saudi Arabia would hurt itself by cutting back on its oil supplies because it would risk losing market share to the benefit of the country. other exporters while losing its reputation as a stable player in the market.

UBS badysts expect growth in oil demand to slow to 1.2 million barrels a day in 2019, driven by higher oil prices and weaker economic growth, just ahead of schedule. above the long-term average, adding that demand is expected to remain stable in OECD countries, with China and India continuing to stimulate growth.

At the same time, Russia's oil production is currently 150,000 barrels higher per day than at its October 2016 level, a baseline for a global agreement on oil production, said the minister. Energy, Alexander Novak, quoted by the TASS news agency.

Iran's crude oil imports by South Korea fell to zero in September, according to data from state-owned Korea National Oil Corp.

However, US crude output has risen by almost a third since mid-2016 and this increase in production could help offset the loss of Iranian exports.

US crude inventories are expected to have risen for the fifth week in a row last week, according to a Reuters poll ahead of the weekly data from the US Energy Information Agency (EIA) early Wednesday at local time.

API data showed US crude inventories rose 9.9 million barrels last week to 418.4 million barrels, while badysts forecast an increase of 3.7 million barrels. barrels.

Read also: Oil prices have risen slightly even though Saudi Arabia promises to increase its output

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