Yemisi Izuora
Prices nudged higher on Friday but were set for a second weekly drop amid higher U.S. crude inventories, an ongoing Sino-U.S. trade war and concerns over the death of a prominent Saudi journalist.
U.S. West Texas Intermediate crude for October delivery was up 27 cents, or 0.4 percent, at $68.92 a Barrel, while front-month London Brent crude for December delivery was up 34 cents, or 0.4 percent, at $79.63 a barrel.
For the week, U.S. crude was down 3.5 percent, while Brent was 1.1 percent lower, putting both on track for a second consecutive weekly decline.
“EIA Weekly Petroleum Status Report was a complete shocker sending Oil markets spiralling lower amidst some concerning development for Oil bulls,” said Stephen Innes, head of trading APAC at OANDA in Singapore.
U.S. crude stocks last week climbed 6.5 million barrels, the fourth straight weekly build, almost triple the amount analysts had forecast, the U.S. Energy Information Administration said on Wednesday.
Inventories rose sharply even as U.S. crude production slipped 300,000 barrels per day to 10.9 million bpd last week due to the effects of offshore facilities closing temporarily for Hurricane Michael.
President Donald Trump said on Thursday he presumes missing Saudi journalist Jamal Khashoggi is dead and that the U.S. response to Saudi Arabia will likely be “very severe” but that he still wanted to get to the bottom of what exactly happened.
The United States and other Western nations are in a dilemma about how to respond because of lucrative business ties, including weapons sales to Riyadh.
Meanwhile, Iranian oil exports may have increased in October when compared to the previous month as buyers rush to lift more cargoes ahead of looming U.S. sanctions that kick in on November 4.
An unprecedented volume of Iranian crude oil is set to arrive at China’s northeast Dalian port this month and in early November before U.S. sanctions on Iran take effect, according to an Iranian shipping source and data on Refinitiv Eikon.
So far, a total of 22 million barrels of Iranian crude oil loaded on supertankers owned by the National Iranian Tanker Co (NITC) is expected to arrive at Dalian in October and November, the data showed. Dalian typically receives between 1 million and 3 million barrels of Iranian oil each month, according to data that dates back to January 2015.
In global markets, stocks in Asia fell on Friday as global sentiment soured on issues ranging from trade worries, Italy’s 2019 budget, higher U.S. interest rates and growth concerns in China that led to a slump in Chinese shares in the previous session.