United States crude slumps below $70/bbl after large stock build

United States crude slumps below $70/bbl after large stock build

Oil crept up on Thursday amid ongoing tensions over the death of a prominent Saudi journalist, with prices steadying after a big drop overnight due to a jump in U.S. crude stockpiles.

Brent crude, on the other hand, slumped to $1.31, or 1.6 percent, at $80.10 a barrel by mid-afternoon of Wednesday, barely registering gains of $1.15 per barrel from the previous three sessions.

Dalian typically receives between 1 million and 3 million barrels of Iranian oil each month, according to data that dates back to January 2015.

The crude oil futures market has felt the rise of USA crude oil exports with growing volumes of West Texas Intermediate futures and options traded in Asian and European hours, making the WTI contract an nearly 24-hour benchmark, Owain Johnson, managing director for energy research and development at exchange operator CME Group, said on Thursday. "I think we've endured a correction in the market and concerns surrounding lost Iranian barrels will re-emerge and the market will stabilise".

Oil traded near the lowest level in a month after a bigger-than-expected gain in American stockpiles overshadowed tensions between the US and Saudi Arabia over a missing critic of the kingdom.

CNPC is not expecting any Iranian oil to arrive at Dalian, a source familiar with the matter said, adding that buyers are unlikely to lift Iranian oil from bonded tanks in Dalian due to the United States sanctions.

As a result, USA gasoline inventories are at a record high for this time of year, almost 10% above the five-year average.

"The impact of the inventor y-jump weighed on the market and oil seems bearish", stated Kaname Gokon, who is a trader in Japan.

There will be no cover-up in Jamal Khashoggi's death - Turkey
Turkish investigators are still searching for Khashoggi's body, which they believe was cut into pieces after he was killed. The Turkish government nearly immediately accused the Saudi authorities of killing the journalist, which Riyadh denied.

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.

In spite of this analysis, there is uncertainty about the future of oil prices, as some analysts say that spare capacity in OPEC countries, especially in Saudi Arabia, has become limited after the Kingdom increased its production to 10.7 million barrels per day.

Top exporter Saudi Arabia pumped most of the extra oil, raising output by 524,000 bpd in September compared to May, the document showed.

There has been indication that India may not totally stop import of crude oil from Iran. U.S. sanctions on Iran's oil exports are scheduled to kick in on November 4.

Continued weakness in global equities was also a weight on crude this week, analysts said, underlining worries about global growth prospects and dampening demand for assets perceived as risky, including most commodities.

At the same time, Saudi Arabia and other Gulf producers have boosted their exports in response to the earlier rise in prices and pressure from the United States to cool the market.

The US dollar index that tracks the US dollar against a basket of the other currencies edged up 0.06 percent to 95.41 on Thursday and reached a fresh one-week high.

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