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

MODEC Ramps Up Hammerhead FPSO Work After ExxonMobil's Go-Ahead

Timor Gap Boosts Stake in Finder Energy’s Timor-Leste Oil Fields

Russia Targets 2028 for Sakhalin-3 Gas Project Start Up

Hanwha Ocean's Tidal Action Drillship Starts Maiden Job with Petrobras

Brownfield Output Decline Accelerates, says IEA

PV Drilling Takes Ownership of Noble Corporation’s Stacked Jack-Up Rig

POSH Set to Tow Nguya FLNG from China to Eni’s Congo Field

Chinese Contractor Secures Offshore Oil and Gas ‘Mega Deal’ from QatarEnergy

Floating Offshore Wind Test Center Planned for Japan

Shelf Drilling Lands New Jack-Up Contract in Vietnam, Extends Egypt Deal

Current News

MODEC Ramps Up Hammerhead FPSO Work After ExxonMobil's Go-Ahead

Aesen, DOC JV Targets Subsea Cable Logistics

Timor Gap Boosts Stake in Finder Energy’s Timor-Leste Oil Fields

SBM Offshore Starts Construction of FSO for Trion Oil Field off Mexico

Russia Targets 2028 for Sakhalin-3 Gas Project Start Up

Seatrium Secures ABS Backing for Deepwater FPSO Design

MDL Secures Cable Laying Job in Asia Pacific

Hibiscus Petroleum Starts Drilling at Teal West Field off UK

Yinson Production Nets DNV Approval for New FPSO Hull Design

Hanwha Ocean's Tidal Action Drillship Starts Maiden Job with Petrobras

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