Oil prices fall on signs of rising supply, economy worries

Oil prices fall on signs of rising supply, economy worries

Oil prices fall on signs of rising supply, economy worries

Information released Wednesday by the U.S. Energy Information Administration (EIA) said U.S. commercial crude stockpiles rose by 3.2 million barrels, compared with expectations for an increase of 4.1 million barrels.

The state-run reported the call late Saturday night, saying "the efforts to maintain supplies to ensure the stability of the oil market and ensure the growth of the global economy" were discussed by the two leaders.

So, the market is betting on supply that may be there later but it is clear that it is not here now.

The looming sanctions on Iran's energy sector, which go into full force November 4, have played a major part in the oil market's rally to almost four-year highs in early October.

According to API data, the six-week running tally of crude oil inventory gains equals 27 million barrels.

The US decision to grant the waivers came after major importers of Iranian crude resisted calls by Washington to end their oil purchases as winter looms. Oil companies boosted shale drilling in Texas, Colorado and other states in response to a 48 percent rally in prices.

Anticipating a fall in global supply, the Organization of the Petroleum Exporting Countries raised production by 400,000 barrels per day to 33.31 mln bpd in October, the highest since 2016, led by Saudi Arabia, the United Arab Emirates, and Libya, a report by Reuters said.

While futures in NY edged higher on Friday on signs of a possible trade deal between the USA and China, they're still on course for a 5.7 percent weekly loss.

The other four countries to get waivers remained to be identified, but Turkey was predicted to be one of them.

Now, with USA sanctions prohibiting the purchase of Iranian oil by non-exempt countries and organisations set to come into effect on November 04, and with a series of headwinds set to confront the global economy in 2019, the outlook for prices is ambiguous at best.

In the coming weeks, traders keep a close eye on US sanctions on Iranian crude exports.

Production in the U.S. is now estimated to be more than 11 million barrels a day and growing. Official U.S. data on inventories will be published at 1030 EDT (1430 GMT).

Meanwhile, output from top producers Saudi Arabia, Russia and the United States - as well as from OPEC as a whole - has continued to rise.

In addition, the USA is increasing its oil production rates and doing its bit to help lower the oil price.

The United States has already imposed tariffs on $250 billion worth of Chinese goods and China has responded with retaliatory duties on $110 billion worth of US goods.

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