Oil edges back from big slump as Iran sanctions return to focus

Killing of journalist Jamal Khashoggi can trigger oil prices rally

On whether OPEC and OPEC+ can fill the gap in case Iran left the oil market following U.S. sanctions, Falih indicated that Saudi Arabia had increased its production a lot since June to reach 10.7 million bpd.

Saudi OPEC governor Adeeb Al-Aama on Thursday said that the oil market could see oversupply in the fourth quarter.

United States sanctions on the oil sector in Iran, the third-largest producer in OPEC are set to start on November 4.

The minister reiterated that the market is unable to find a replacement for Iran's oil, urging Trump to abandon his plan to impose sanctions on the country.

"The market looks negative with lower numbers likely", said Robin Bieber, technical analyst at London brokerage PVM Oil.

"Sentiment in the crude-oil market has - surprisingly fast - turned from the '$95 in a matter of weeks' on Iran sanctions to long liquidation and despair", said Ole Hansen, head of commodities strategy at Saxo Bank A/S.

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Key players in the market are now issuing contradictory warnings, with the International Energy Agency fearing a looming shortage as OPEC frets about a resurgent glut. Norway's Equinor ASA's kept its focus on continued spending restraint, even as profits jumped to a four-year high.

The minister indicated that the agreement starts in January 2019 and will allow oil countries to intervene to re-balance the market in any appropriate time from January onward. The contract rose 39 cents on Wednesday.

From Nigeria, India's crude oil imports dropped 6.36 per cent to 1.03 MT in September. During the same quarter, Iran's crude oil output dropped 5.73 per cent to 3,599 thousand barrels per day.

Other OPEC members, meanwhile, had added only 105,000 barrels per day of extra oil in total during the period, which means they are not capable of producing more than current levels, he said. Washington is largely depending on Saudi Arabia to fill the gap left by the loss of the Iranian barrels. Also, OPEC's September output was 850,000 barrel per day above where it was in May, not including Congo, while Russia's production in September is up 390,000 barrel per day from May, according to Platts survey data. Cushing crude stocks rose to 33 million barrels on Tuesday, up nearly 1.8 million barrels from the previous week, traders said, citing a report by market intelligence firm Genscape. Over the past four weeks, crude oil imports averaged about 7.7 million barrels per day, 0.7 percent more than the same four-week period a year ago.

US oil prices jumped Wednesday, up after days of weakness as a bigger-than-expected drawdown in USA gasoline and diesel inventories forecast a coming seasonal increase in refining demand.

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