Oil prices tumble as USA crude inventories surge

Gladys Abbott
October 21, 2018

WTI crude oil settles -1.6% to a five-week low $68.65/bbl, notching a two-day loss of 4.5% following data showing a fourth straight weekly increase in USA crude inventories; Brent -0.6% at $79.58/bbl.

Turkey's biggest oil importer, TÜPRAŞ, is in talks with US officials to obtain a waiver allowing it to keep buying Iranian oil after Washington reinstates sanctions on Iran's energy sector in November, industry sources told Reuters.

"We have various ways of selling our oil and when the tankers reach Dalian, we will decide whether to sell it to other buyers or to China", the source said.

"We have conveyed to him that the price of crude oil is a matter of concern for our domestic economy and directly affects the common people", he said at a press briefing. Soon after India-Russia inked the billion dollar deal, there were reports that the U.S. might impose sanctions on India from inking a deal with Russia.

Crude bumped higher this year as uncertainties persisted over whether the Organization of Petroleum Exporting Countries and its partners can offset potential supply losses from US sanctions on Iran that kick in early next month.

Dalian is a major oil hub in China and, Reuters notes, Iran has used storage facilities at the port to keep crude during the previous worldwide round of sanctions against Tehran.

November natural-gas futures NGX18, +1.03% rose 1.6% to $3.25 per million British thermal units, leaving it with a weekly advance of 2.8%.

OPEC officials are concerned that increased USA oil production and a seasonal buildup of oil stock could put downward pressure on oil prices, according to an internal document shared among members and reviewed by the Wall Street Journal.

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Hyundai Motors has reportedly ended its cooperation with the Iranian company Kerman Khodro in the Special Economic Zone, Arg-e Jadid after the USA president announced it will re-impose sanctions on Iran.

President Donald Trump said on Thursday he presumes missing Saudi journalist Jamal Khashoggi is dead and that the United States response to Saudi Arabia will likely be "very severe" but that he still wanted to get to the bottom of what exactly happened. Among the stakeholders are the US, Iran and others.

Iran is India's third-largest oil supplier after Iraq and Saudi Arabia.

"The looming Iranian supply disruption and the conflict between the USA and Saudi Arabia are pushing traders to take a cautious stance at the moment", Will Yun, a commodities analyst at Hyundai Futures Corp., said by phone from Seoul.

"We evaluate waivers on a case by case basis", said U.S. State Department spokeswoman Heather Nauert.

Kardor said Iran did not have any difficulties receiving payments for oil exports and said the Islamic Republic could accept payments in euros instead of dollars if necessary. The contract declined 1.6 percent to $68.65 on Thursday. China's imports from Iran fell to 430,000 bpd in September, the lowest amount since 2016.

"China's healthy oil demand, together with persistently high compliance of countries participating in the OPEC-led output-cut agreement, are supportive of prices in today's trading session", Abhishek Kumar, senior energy analyst at Interfax Energy in London.

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