OPEC: Factors beyond producers’ control are impacting oil market

A worker walks down the stairs of an oil tank at Turkey's Mediterranean port of Ceyhan

A worker walks down the stairs of an oil tank at Turkey's Mediterranean port of Ceyhan

Oil prices fell to two-week lows on Thursday as it extended big losses from the previous session amid a rout in global stock markets, with prices also hit by an industry report showing USA crude inventories rose more than expected.

U.S. West Texas Intermediate (WTI) crude futures fell $1.81, or 2.5 percent, to $71.36 a barrel.

Almost 40 percent of daily crude oil production and more than one-third of natural gas output was lost from offshore U.S. Gulf of Mexico wells on Wednesday because of platform evacuations and shut-ins ahead of Hurricane Michael.

Russian Federation achieved a new post-Soviet oil production record in September with 11.54 million barrels per day on average.

Goldman Sachs says US shale oil production can continue to increase by 1 million bpd every year until 2021, according to a new report by the investment bank. OPEC has been under the hit list from the USA for declining the increased outcome to answer rising oil prices.

He also noted that triple digit prices "would require a sustainable outage in Iranian exports going down to zero plus another disruption someplace like Venezuela; the way we're seeing it is long dated oil prices are rising, the front-end is weakening which is telling you that hey, we don't have a problem today, we potentially have a problem tomorrow".

The Organization of Petroleum Exporting Countries (OPEC) reduced the forecast of global oil demand growth by 80,000 barrels daily to 1.54 mln barrels per day, OPEC said in its report released on Thursday.

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Platts reported that the 33.07 million barrels in last month were the highest OPEC has manufactured since July 2017, if the Republic of Congo is not included in the list.

"The enhanced volatility in the market in general is spilling over into energy, as investors are reducing risk", said Rob Thummel, managing director at Tortoise, which manages $16bn (€13.8bn) in energy-related assets.

Refinery crude runs fell by 352,000 barrels per day as utilisation rates dropped 1.6 percentage points, the EIA data showed.

The South Asian nation was hoping to lift significantly higher volumes in the current fiscal year, after Tehran offered a discount on shipping and an extended credit period, before the USA decision on sanctions changed its plans. The fears are growing that the USA demands for an Iran oil embargo could cause a significant supply shortfall.

Later today, we'll see unofficial United States inventory data from the American Petroleum Institute.

The cuts represent 680,107 barrels per day of oil production, BSEE said, citing reports from 30 companies. However, Gulf production cuts have been less of an impact on supplies with the rise of USA shale oil. Demand growth of 1.54 million barrels a day this year will slow to 1.36 million next year.

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