Record U.S. crude production and signals from Iraq, Abu Dhabi and Indonesia that output will grow more quickly than expected in 2019 pushed the price of Brent oil to its lowest since mid-August earlier in the week.
US West Texas Intermediate (WTI) crude futures were at US$61.95 per barrel, up 28 US cents, or 0.4 per cent, from their previous settlement.
"The rout continues for oil prices, which is on course for its longest losing streak on record (oil declining for 10 consecutive sessions) with WTI dropping below $60 and Brent cracking $70", DailyFX analyst Justin McQueen told UPI.
The United States is determined to push Iranian oil exports to zero, U.S. Special Representative Brian Hook said on Wednesday, through a "calibrated" approach using maximum economic pressure without lifting oil prices. "After the USA mid-term elections, we would also expect Saudi Arabia and GCC allies to reduce supply slowly to allow the physical markets to absorb the excess crude first (other than Iranian barrels)", said the report.
Ahmad added that he saw a slowdown in economic and fuel demand growth as "more of a risk for oil over the coming months".
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Expectations that U.S. sanctions on Iran could take substantial crude volumes out of the market have been mitigated by steadily increasing production out of Saudi Arabia, Russia, and the USA shale industry. To put that in context, the BP Statistical Review of World Energy 2018 puts global daily crude production at 92.6 million barrels per day for a year ago, so the increase is meaningful.
Russia's TASS news agency, citing an unnamed source, reported that Russian Federation and Saudi Arabia - the biggest producers in an Opec-led alliance that has been limiting supply since 2017 - had started bilateral talks on curbing supplies.
"In the case of Saudi Arabia our regional analyst believes that fiscal deficit will continue to improve but they project the full year deficit at 3.3 percent with Brent assumed at $74/bbl in 2018", said the report. Temporary waivers on importing Iranian crude were taken by a number of countries, including some of the OPEC members' biggest customers, but these will expire in six months.
US crude stocks climbed by 7.8 million barrels in the week ending November 2 to 432 million, data from the American Petroleum Institute showed on Tuesday.
Meanwhile, Opec's production in October reached the highest level since 2016, and Russian Federation hiked its output last month to a post-Soviet record of 11.4 million barrels a day.
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Oil notched its longest losing streak in four years as expanding USA stockpiles overshadowed supply concerns from the Persian Gulf to Latin America.
Zanganeh claimed the Trump administration may have been able to "superficially" bring fuel prices down ahead of the USA mid-term elections this week but that there's bound to be a hike in prices in the future.
But it is not only the United States that has meaningfully raised oil production in recent weeks.
Russian Federation and Saudi Arabia, top producers in an OPEC-led alliance, started bilateral talks on a return to production cuts next year, Russia's TASS news agency reported, citing an unnamed source. "OPEC and Russian Federation may use cuts to support $70 per barrel", said Ole Hansen, head of commodity strategy at Saxo Bank.
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