Oil Falls Below $79 as Rising U.S. Stockpiles Weigh

Posted by Michelle Howard
Thursday, October 18, 2018

Oil fell more than $1 a barrel to below $79 on Thursday as the fourth weekly increase in U.S. crude inventories suggested ample supply, while Saudi-U.S. tension and falling Iranian exports lent support.

U.S. crude inventories rose 6.5 million barrels last week, the Energy Information Administration said on Wednesday, the fourth straight weekly increase and almost three times what analysts had forecast.

Brent crude, the global benchmark, was down $1.07 at $78.98 a barrel at 1330 GMT. It has dropped almost $8 since reaching $86.74, the highest since late 2014, on Oct. 3. U.S. crude was down $1.07 at $68.68.

"Stocks are building," said Olivier Jakob, oil analyst at Petromatrix. "It's a continuous trend. Week after week, it does start to add up."

Oil had been rising this week on concern about a decline in Iranian exports due to U.S. sanctions and tension between the United States and Saudi Arabia after the disappearance of Saudi journalist Jamal Khashoggi.

U.S. lawmakers pointed the finger at the Saudi leadership over the disappearance of the Saudi critic, suggesting sanctions could be possible. Saudi Arabia denies that it had any role in Khashoggi's disappearance.

But President Donald Trump on Wednesday gave Saudi Arabia the benefit of the doubt in the journalist's disappearance, suggesting the White House may not take additional action against Saudi Arabia.

Signs that Iranian oil exports have been falling more steeply than some in the market expected amid looming U.S. sanctions have also underpinned the market.

U.S. sanctions on Iranian oil take effect on Nov. 4 and buyers are already stopping or scaling back their Iranian crude dealings, according to tanker data and industry sources.

Exports have declined already to about 1.5 million barrels per day (bpd), up to 1 million bpd below levels seen earlier this year. Some analysts say the significance of the drop in supplies may be starting to wane as a source of price support.

"Assuming that Iranian crude exports will stabilise around 900,000 bpd, one can make a strong case that the peak bullish impact of Iran is in fact already behind us," analysts at JBC Energy said in a report.

By Alex Lawler, Additional reporting by Osamu Tsukimori

Categories: Middle East Shale Oil & Gas

Related Stories

China's ENN, Zhenhua Oil Ink LNG Supply Deals with ADNOC

Pakistan’s OGDC to Start Production at ADNOC’s Offshore Block by 2027

Borr Drilling Bags Three New Assignments for its Jack-Up Drilling Rigs

Second Hai Long Substation Heads to Project Site Offshore Taiwan

China Unveils Plans for New Offshore Wind Farms to Tackle Carbon Emissions

AIRCAT 35 Crewliner Vessels Delivered to Service TotalEnergies Angola

Abu Dhabi's NMDC Group Gets $1.1B Subsea Gas Pipeline Job in Taiwan

ADES’ Fourth Suspended Jack-Up Rig Gets Work Offshore Thailand

Saipem’s Castorone Vessel on Its Way to Türkiye’s Largest Gas Field

Flare Gas Recovery Meets the Future

Current News

MODEC, Sumitomo Partner Up for Delivery of Gato do Mato FPSO

Chuditch Gas Field Up for Summer Drilling Ops as Sunda Reshapes Ownership Structure

EnQuest Bags Two Production Sharing Contracts off Indonesia

Hanwha Drilling’s Tidal Action Drillship En Route to Petrobras’ Roncador Field

China's ENN, Zhenhua Oil Ink LNG Supply Deals with ADNOC

MODEC Wins ExxonMobil Guyana’s Hammerhead FPSO Contract

India Stretches Bids Deadline for 13 Offshore Deep-Sea Mineral Blocks

Indonesia Awards Oil and Gas Blocks to Boost Reserves

Sapura Energy Nets $22.6M in Offshore Support Vessel Contracts

CNOOC Puts Into Production New Oil Field in South China Sea

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com