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TOKYO (Reuters) – Oil prices fell on Friday and were heading for a third weekly loss. OPEC Governor, Saudi Arabia, said the market could soon be saturated after the fall in global equities darken the demand outlook.
A drilling rig from the Austrian oil and gas group OMV is being seen on their exploratory drilling site near Maustrenk, Austria, on October 9, 2018. REUTERS / Leonhard Foeger / File Photo
The Brent crude futures price, LCOc1, was down 51 cents, or 0.7%, to $ 76.38 per barrel from 0331 GMT. The global benchmark is on the way to a weekly loss of more than 4%.
US crude CLc1 lost 66 cents, or 1%, to 66.68 dollars a barrel. The US benchmark is set for a 3.5% loss this week.
"Bearish sentiment could force a new test of support at $ 70.0 a barrel," Fitch Solutions said in a note on Friday.
The governor of Saudi Arabia, OPEC, said Thursday that the oil market could face an oversupply during the quarter.
"The market in the fourth quarter could evolve into an oversupply situation, as evidenced by the rise in inventories in recent weeks," said Adeeb Al-Aama to Reuters.
Saudi Energy Minister Khalid Al-Falih said an intervention may be needed to reduce oil stocks after increases in recent months.
US stocks of crude oil rose last week for the fifth week in a row, while gasoline and distillate inventories fell, the Energy Information Administration announced this week.
Falling stock markets drove up oil prices this week as Wall Street posted its biggest daily drop since 2011.
"The drop of nearly $ 10 per barrel of Brent observed in October is a consequence of global equity sales and the general sentiment of risk in the market," said Fitch Solutions.
Financial markets have been hit hard by a number of concerns, including the US-China trade war, the collapse of emerging market currencies, rising borrowing costs and bond yields, and rising economic concerns. Italy.
There are also signs of a slowdown in world trade, with container and bulk freight rates declining after rising for most of 2018.
Despite this, Fitch Solutions said "oil fundamentals … remain broadly bullish," largely because of US sanctions against Iranian oil exports, which begin Nov. 4.
Washington is pressuring governments around the world to stop importing Iranian oil.
Most of them, including its main customer, China, are queuing up, and Iran has begun to store its unsold oil on its tanker fleet in the US. hope to be able to sell crude oil quickly once the sanctions are lifted.
Report by Henning Gloystein and Aaron Sheldrick; Edited by Richard Pullin and Joseph Radford
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