ibusinesslines.com October 18, 2018

Oil prices tumble on surprise build in USA crude stockpiles

10 June 2018, 03:12 | Kelvin Horton

Oil prices tumble on surprise build in USA crude stockpiles

Oil prices tumble on surprise build in USA crude stockpiles

The US government has asked Saudi Arabia and a number of other OPEC members to increase their production by around one million barrels a day, Bloomberg reported yesterday, citing anonymous sources. The market has also seen a buildup in the inventories. "We always have conversations with the United States about the stability of the oil market", a senior Saudi official told Reuters, though he did not confirm whether the aforementioned phone call took place.

Further weighing on prices has been rising USA output, which hit another record last week at 10.8 million bpd.

The price for Brent crude oil was down 1.16 percent as of $74.42 per barrel as of 9:15 a.m. EDT. "We always have conversations with the USA about the stability of the oil market".

That's a 28% gain in two years, putting the U.S. close to becoming the world's biggest crude producer, edging nearer to the 11 million bpd churned out by Russian Federation.

U.S. West Texas Intermediate (WTI) crude rose $1.22, or 1.88 percent to $65.95 a barrel.

Brent crude LCOc1 rose 27 cents to $75.65 a barrel by 0412 GMT after dropping to its lowest since May 8 on Tuesday. In post-settlement trade, Brent turned positive, rising 18 cents a barrel. It finished the previous session 1.6 percent lower at $64.75. "The U.S. tried it last time against Iran, but oil prices got to $140 a barrel".

In announcing his decision, Trump also warned that the US would impose the "highest level" of sanctions on Tehran.

The group is due to meet at its headquarters in Vienna, together with top producer but non-OPEC member Russian Federation, on June 22 to discuss production policy.

OPEC and Russian Federation meet on June 22/23 to discuss production policy. Its output has been hampered by inadequate investment, mismanagement and USA sanctions.

Three sources have told Reuters that Venezuelan state firm PDVSA is considering declaring force majeure on some exports, amid plummeting output and tanker bottlenecks at ports. The United States is the second largest producer of crude oil and higher prices have now become more important to the US economy then lower prices.

Oil prices fell on Friday, extending losses as JP Morgan cut its crude price forecast, after already weakening on concerns about surging USA output weighed and falling demand in China.

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