Oil prices extended gains into a fourth session on Wednesday, buoyed as industry data showed a surprise decline in USA crude inventories and as geopolitical tension over the disappearance of a prominent Saudi journalist stoked supply worries.
The West Texas Intermediate for November delivery rose 0.44 US dollar to settle at 71.78 dollars a barrel on the New York Mercantile Exchange, while Brent crude for December delivery added 0.35 dollar to 80.78 dollars a barrel on the London ICE Futures Exchange. The global benchmark, which hit a more than two-week low late last week as equity markets dropped, is trading about $5 below a four-year high of $86.74 marked on October 3.
Mr. Khashoggi's disappearance has strained U.S. -Saudi ties and sparked global outrage, but fears that Saudi Arabia could weaponize oil supply in response to hypothetical U.S. sanctions are as yet unfounded, Mr. Tchilinguirian said.
Overall, analysts forecast that US crude stockpiles rose last week for the fourth straight week, by about 2.2 million barrels, according to a Reuters poll ahead of weekly inventory reports.
In addition to these comments, escalating political tensions between Saudi Arabia and the United States and the potential negative impact on Saudi oil supply provided an additional boost to crude oil.
Inventories rose sharply even as USA crude production slipped 300,000 bpd to 10.9 million bpd last week, which analysts attributed to the effects of offshore facilities closing temporarily for Hurricane Michael.
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Weak export activity coupled with lower refinery utilization rates and strong production contributed to a build in USA crude inventories last week, the survey said.
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. With sanctions set to be applied on Iran, deliveries from them to India have been considerably higher through the first nine months of the year compared to the same period in 2017, as India has been a willing buyer, particularly earlier in the year, while other customers in countries such as South Korea and France have gradually dwindled away.
In relevant remarks last week, Zanganeh dismissed Saudi officials' claims that the country could compensate for a loss of Tehran's supplies in the global market after the imposition of the USA sanctions.
"And then next year, we start the entire merry-go-round again, and I think gas prices and crude oil prices will be very similar to where they've been in the last six weeks", Kloza said.
New U.S. sanctions on Iranian oil exports start on November 4, while Iran has accused Saudi Arabia and Russian Federation of breaking an OPEC-led agreement on output cuts by producing more crude. Electric vehicles, he pointed out, are in the passenger vehicle segment, which accounts for only a quarter of oil demand.
Since the oil embargo of the 1970s, Saudi Arabia has avoided threats to use its "oil weapon" in diplomatic affairs, insisting that it favors stable markets and separates oil and politics.
The EIA report further said that gasoline stockpiles fell by 2 million barrels last week, while distillate stockpiles declined by 800,000 barrels.