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Oil extends declines as Saudi Arabia commits to meet demand

Published 2018-10-23, 09:44 p/m
© Reuters.  Oil extends declines as Saudi Arabia commits to meet demand
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* Darkening economic outlook also weighs on markets

* U.S. crude stocks rise by 9.9 million barrels - API

By Henning Gloystein

SINGAPORE, Oct 24 (Reuters) - Oil prices on Wednesday extended falls from the previous day, when crude slumped as much as 5 percent, after Saudi Arabia said it would make up for supply disruptions from U.S. sanctions targeting Iran's petroleum exports from next month.

Front-month Brent crude oil futures LCOc1 were at $76.37 a barrel at 0031 GMT, 7 cents below their last close.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $66.31 a barrel, 12 cents below their last settlement.

The dips came after Brent closed down 4.3 percent and WTI 4 percent in the previous session. Energy Minister Khalid al-Falih said at an investment conference in Riyadh on Tuesday that despite expected supply disruptions from U.S. sanctions against Iran that kick in from Nov. 4, Saudi Arabia would step up to "meet any demand that materialises to ensure customers are satisfied." prices fell substantially... as Saudi Arabia released assurances it could supply more to the global market," Australia's Rivkin Securities said.

Beyond the pledge by Saudi Arabia, oil prices are also being weighed down by economic concerns.

South Korea's KOSPI-100 equity index .KS100 has now fallen by nearly 19 percent over the past year, the fastest rate of decline since the financial crisis of 2008/09.

The KOSPI-100 has correlated closely with the growth in international trade, given the South Korean economy's strong export orientation, so the decline suggests a slowdown in global trade. the United States, commercial crude inventories rose by 9.9 million barrels in the week to Oct. 19 to 418.4 million, industry group the American Petroleum Institute said on Tuesday. Stanley said "recent trends in refining margins, time spreads and inventories suggest a spell of weakness in oil markets."

Despite this, the U.S. bank said "we still see Brent reaching $85 per barrel by year-end" as Iran sanctions are expected to tighten markets towards the end of the year.

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