Oil prices fall in the face of signs of an increase in global supply

NEW YORK (Reuters) – Oil prices fell on Wednesday and posted the worst monthly performance since mid-2016, judging by the rise in the global supply of crude, but losses were limited by the signs of oil. High demand for fuel in the United States.

The December Brent LCOc1 futures contract, which ended Wednesday, dropped 44 cents to $ 75.47 a barrel. The more active January contract, LCOF9, dropped 91 cents to $ 75.04 per barrel.

CLc1 futures for West Texas Intermediate (WTI) crude fell 87 cents to $ 65.31 per barrel.

They both recorded their worst monthly performance since July 2016, with Brent falling 8.8% for the month and WTI 10.9%.

Investor confidence in risky asset classes, such as equities and energy, turned negative during the month as trade tensions between the US and China sparked concern over the demand.

On Wednesday, market sentiment weighed on the outlook for higher global output. US crude oil production increased 416,000 barrels a day to a record 11.346 million bpd in August, the US Energy Information Administration announced.

The United States and other major producers, Russia and Saudi Arabia, pumped 33 million barrels a day in September, according to Refinitiv data, an increase of 10 million barrels per day since the beginning of the decade.

Russian oil production reached 11.41 million bpd in October, a level never seen since the collapse of the Soviet Union in 1991, Reuters told a source in the industry.

The increase in production comes just before the new US sanctions against Iran, which should come into effect on November 4, should reduce supply.

"There is this perception that there is enough oil on the market at the moment to override Iran's sanctions," said Phil Flynn, an analyst at Price Futures Group in Chicago.

Washington has made it clear to Tehran's customers that it expects its customers to stop buying Iranian crude oil from that date.

However, on Wednesday, US National Security Advisor John Bolton said that although the United States wants to exert maximum pressure on Iran with sanctions on its crude exports, they do not want to harm to friends and allied countries dependent on oil.

Imports of Iranian crude by major buyers in Asia hit their lowest level in 32 months in September. China, South Korea and Japan have sharply reduced their purchases before sanctions, as indicated by the authorities' data and ship monitoring.

Earlier in the session, oil prices rose after the US Energy Information Administration reported that USOILC = ECI crude inventories rose 3.2 million barrels last week, less than expected. Gasoline and distillate inventories decreased, as total product demand in the last four weeks increased 5.4% over the previous year. [EIA/S]

"Upward product trends have offset bearish sentiment," said Matt Smith, director of Commodity Research at ClipperData.

The sentiment of the oil markets was somewhat supported by the stock markets, which retreated after promises of 20 months in a row to China's pledges to support its markets.

The shares were subject to the pressure of the trade war between the two largest economies in the world, the United States and China. The United States imposed tariffs on Chinese goods worth $ 250 billion and China reacted by imposing retaliatory duties on US goods worth $ 110 billion. dollars.