Will take care of nations which will continue to import Iranian oil

Marco Green
October 12, 2018

Oil prices slumped to two-week lows on Thursday as global stock markets fell, with investor sentiment made more bearish by an industry report showing USA crude inventories rising more than expected.

U.S. West Texas Intermediate (WTI) crude futures fell $1.81, or 2.5 percent, to $71.36 a barrel.

The International Monetary Fund downgraded its global economic growth forecasts for 2018 and 2019 on Tuesday, potentially tempering demand for oil and its products.

The American Petroleum Institute reported a 9.75 million barrel increase in USA crude oil inventories.

The WTI Crude Oil market rallied significantly during trading on Tuesday, breaking above the top of the hammer from the Monday session.

Crude inventories rose by 6 million barrels in the week to October 5, data from the Energy Information Administration showed on Thursday.

"The significant increase in crude oil inventories is a reflection of refineries going down for maintenance", said Andrew Lipow, president of Lipow Oil Associates.

Brent crude fell $1.74 a barrel to a low of $81.35, its lowest since September 27, before recovering a little to trade around $81.70 by 0850 GMT.

Falling U.S. equity markets and a global risk-off environment also weighed on crude futures.

"Prices are peaking at the most opportunistic time given waning global growth narrative", said Stephen Innes, head of trading APAC at OANDA in Singapore. They earlier touched their lowest since September 27 at $81.35, after closing 2.2 percent lower on Wednesday.

OPEC Secretary-General Mohammad Barkindo said the oil cartel "remains ready to keep oil markets fully supplied".

In the United States, almost 40 percent of daily crude oil production was lost from offshore US Gulf of Mexico wells on Tuesday because of platform evacuations and shut-ins ahead of Hurricane Michael. Earlier, US had asked buyers of Iranian oil to cut imports to zero starting in November.

Michael crashed ashore Florida on Wednesday as the third most powerful hurricane ever to strike the US mainland.

Other reports by Click Lancashire

Discuss This Article