Two issues playing on the minds of investors in the global oil market – US sanctions on Iran and the possibility of US sanctions on Saudi Arabia, potential brought the price of oil during the week in line with a two week losing streak.
There was drop of 1.58 percent and 2.2 percent in the price of the West Texas Intermediate (WTI) for December delivery and Brent oil price for December delivery respectively for the week ending Oct. 26.
The US sanctions on Iran is to come into effect from November 4. There are also concerns among investors that p\oil production could be cut by Saudi Arabia as a reply to the possible international sanctions against it in relation to the murder of veteran Saudi journalist Jamal Khashoggi.
According to analysts, there can be a supply shock is Saudi Arabia retaliates to possible US and other international sanctions which would push up oil prices. However such fears were attempted to be brushed off by Saudi Arabia's Energy Minister Khalid Al-Falih on Monday who said that "there is no intention" of Saudi Arabia to engage in such actions and that the kingdom would play a "constructive and responsible role" in world energy markets.
According to Al-Falih, the daily crude output would also be increased by the Saudis from 109.7 million barrels to 11 million barrels. The leader of oil producing cartel OPEC has a total capacity to produce 12 million barrels a day.
The news of Saudi Arabia planning to increase oil output brought down U.S. oil prices by 4.22 percent even as the broader US market dipped because of disappointing quarterly results from the corporate. WTI lost 2.93 U.S. dollars to settle at 66.43 dollars a barrel, and Brent sank 3.39 dollars to 76.44 dollars per barrel.
The Organization of the Petroleum Exporting Countries (OPEC) and its partners are in "produce as much as you can" mode, said Saudi Arabia's Energy Minister Khalid al-Falih.
There was a rebound in the US oil prices last Tuesday following the Tuesday drop because of a drop in stockpiles of gasoline and diesel in the previous week in the country.
According to the EIA's latest October Short-Term Energy Outlook (STEO), the forecast price of Brent crude oil spot prices is expected to be about 81 dollars per barrel on the average in the fourth quarter of 2018 compared to the average of 70 dollars per barrel in September. The agency also forecast a drop of the prices to about 75 dollars per barrel on the average in 2019.
The EIA also forecast that increased global crude oil production would be supported by the higher crude oil prices during the end of 2018 and in 2019.
However the agency also warned that its forecast can be clouded because of the sanctions by the US on Iran, the withdrawal of the US from the Joint Comprehensive Plan of Action (JCPOA) in May and the manner in which other countries to the pact react to the US sanctions.
(Source:www.xinhuanet.com)
There was drop of 1.58 percent and 2.2 percent in the price of the West Texas Intermediate (WTI) for December delivery and Brent oil price for December delivery respectively for the week ending Oct. 26.
The US sanctions on Iran is to come into effect from November 4. There are also concerns among investors that p\oil production could be cut by Saudi Arabia as a reply to the possible international sanctions against it in relation to the murder of veteran Saudi journalist Jamal Khashoggi.
According to analysts, there can be a supply shock is Saudi Arabia retaliates to possible US and other international sanctions which would push up oil prices. However such fears were attempted to be brushed off by Saudi Arabia's Energy Minister Khalid Al-Falih on Monday who said that "there is no intention" of Saudi Arabia to engage in such actions and that the kingdom would play a "constructive and responsible role" in world energy markets.
According to Al-Falih, the daily crude output would also be increased by the Saudis from 109.7 million barrels to 11 million barrels. The leader of oil producing cartel OPEC has a total capacity to produce 12 million barrels a day.
The news of Saudi Arabia planning to increase oil output brought down U.S. oil prices by 4.22 percent even as the broader US market dipped because of disappointing quarterly results from the corporate. WTI lost 2.93 U.S. dollars to settle at 66.43 dollars a barrel, and Brent sank 3.39 dollars to 76.44 dollars per barrel.
The Organization of the Petroleum Exporting Countries (OPEC) and its partners are in "produce as much as you can" mode, said Saudi Arabia's Energy Minister Khalid al-Falih.
There was a rebound in the US oil prices last Tuesday following the Tuesday drop because of a drop in stockpiles of gasoline and diesel in the previous week in the country.
According to the EIA's latest October Short-Term Energy Outlook (STEO), the forecast price of Brent crude oil spot prices is expected to be about 81 dollars per barrel on the average in the fourth quarter of 2018 compared to the average of 70 dollars per barrel in September. The agency also forecast a drop of the prices to about 75 dollars per barrel on the average in 2019.
The EIA also forecast that increased global crude oil production would be supported by the higher crude oil prices during the end of 2018 and in 2019.
However the agency also warned that its forecast can be clouded because of the sanctions by the US on Iran, the withdrawal of the US from the Joint Comprehensive Plan of Action (JCPOA) in May and the manner in which other countries to the pact react to the US sanctions.
(Source:www.xinhuanet.com)
