Oil plunges more than 4 percent as stock market tumbles
- Author: Anthony Vega Oct 24, 2018,
Oct 24, 2018, 1:44
After two days of consolidation, the markets are picking up a bid due to concerns of tightening supply tied to the start of the USA sanctions against Iran's crude exports.
The kingdom, which produces more than a tenth of global supplies, had vowed on Monday not to withhold its output as a political weapon amid the worldwide backlash over the murder of journalist Jamal Khashoggi.
There will not be a repeat of the 1973 oil embargo despite the crisis over the murder of journalist Jamal Khashoggi at the Saudi consulate in Istanbul, the Saudi energy minister reportedly said on Monday.
USA sanctions against Iran's oil exports are due to kick off on November 4.
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In addition to its crude investments, Saudi Arabia intends to partner in liquefied natural gas projects overseas and start trading LNG in the future.
"Saudi and Russian oil production is now close to its highest historical level, and the two countries have no additional capacity to produce more and replace Iran's oil", he added.
Iran's minister of petroleum says Saudi Arabia has submitted to USA pressure, violating an OPEC agreement reached in June not to raise its production.
Saudi Arabia's Energy Minister Khalid Al-Falih was reported by Reuters, with the key headlines found below.
"The rise in oil prices has slowed down the economic growth of many consumer countries, hitting the global economy hard", Zangeneh added.
"The market's knowledge of this disability has led to an increase in oil prices, with the West Texas Intermediate (WTI) and Brent North Sea average rising from $67 and $77 in May to $74 and $84 per barrel respectively in October", he said.
Additionally, U.S. Treasury Secretary Steve Mnuchin, visiting Israel this week, said on Sunday that it will be hard for countries to receive waivers on Iran oil sanctions.
"It will become an open-ended agreement to continue to monitor and work together to stabilize the markets. Then we'll have a clearer picture of what to expect for the first quarter of next year", Varga said.
The American Petroleum Institute is scheduled to release data on U.S. crude stockpiles on Tueday afternoon, followed by more comprehensive report by the U.S. Department of Energy on Wednesday.
USA crude fell US$3.17, or 4.6 per cent, to US$66.19 a barrel, after hitting a session low of US$65.74, the lowest level since August 20.
USA crude inventories have risen by more than 22 million barrels over the last four weeks, the biggest increase since 2015, when the oil market was heavily oversupplied.