Oil prices edge up on surprise drawdown in U.S. crude stockpiles

Andrew Cummings
October 17, 2018

The Russian government is no longer capping oil output increases by local producers, one of the country's top energy companies, Gazprom Neft, said on Tuesday, signalling that Moscow's supply-restraint pact with OPEC has effectively expired for now.

India, the world's third-biggest oil importer, is facing record high retail prices as worldwide crude rate soared and rupee value dipped.

In Saudi Arabia, the potential slaying of a journalist within the Saudi embassy in Turkey is drawing fierce lashback from the global community, prompting threatening Tweets from US President Donald Trump, and Saudi Arabia has doubled down on their stance, threatening to allow the bottom to drop out on Saudi crude production and allowing crude prices to reach $100 per barrel if the US were to take any action.

While there are many factors that could influence global oil prices, Saudi Arabia and other major producers will continue to act to cushion the market from oil price shocks, Falih said at the India Energy Forum here.

"We could have another (round of) unanticipated disruptions that we have seen in Nigeria, Libya and Venezuela". Senior officials on Monday had said that Indian oil companies have optional volumes built in their annual crude oil purchase contracts with suppliers like Saudi Arabia and Iraq that will be more than enough to make up for any shortfall in supplies from sanctions-hit Iran.

USA officials have said they aim to cut Iran's oil exports to zero to force its leaders to change their behavior in the region.

USA crude inventories fell by 2.1 million barrels last week, compared with analyst expectations for a build of 2.2 million barrels, American Petroleum Institute data showed after Tuesday's settlement.

Barrel prices have halted their recent decline as Iranian exports and Saudi tensions keep crude on the high side.

"Earlier today, I held a meeting with Prime Minister Narendra Modi and Petroleum Minister Dharmendra Pradhan and assured them of our full and continuing commitment to meet India's energy demands, especially in oil, and to invest in India", Mr. Al-Falih said.

Falih also said Saudi Arabia wants to invest in Indian downstream projects and strategic oil storage. He also said availability of crude oil to replace lost import volumes from Iran in the wake of United States sanctions is not an issue.

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