USA crude slumps below $70/bbl after large stock build

Iran's Minister of Petroleum Bijan Zangeneh addresses the 4th Iranian Petroleum and Energy Club Congress & Exhibition in Tehran Oct. 16 2018

Both countries earlier this month said they had completely suspended their purchases of Iranian crude ahead of the US sanctions, which will enter into effect on November 5. The Saudi kingdom has stated that it would respond with greater action, if it receives any action from the U.S.

South Korea relies on Iran for 13 percent of its imported oil, making Tehran its third crude supplier following Saudi Arabia and Kuwait.

Trump has repeatedly blasted OPEC over high oil prices and urged the group to pump more.

Saudi Arabia said this month it would ramp up production by 300,000 barrels per day to help offset a sharp reduction of Iran's crude exports next month.

Rising U.S. oil production and exports out of the U.S. Gulf Coast have also prompted exchange operators to launch new contracts priced off Houston. Saudi Arabia could decide to slow-walk future output hikes.

At the most basic level, the policy failed to achieve its stated objective of changing USA support for Israel or forcing Israel to withdraw from the occupied Palestinian territories. Saudi Arabia is an important ally in the Middle East about Iran.

"While the correlation between oil and equities tends to come and go, the relationship has been strong of late as the oil complex has been able to put some seemingly bullish geopolitical developments on hold for now while focusing, instead, upon some significant loosening in global oil balances", Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.

John Kilduff, founding partner at Again Capital, remarked, "That would be such a departure from their stated policy and stance towards the oil market; it's so much against their interest to do it".

Homes and offices in the United States and many other advanced economies switched from heavy fuel oil to cheaper and more reliable heating using natural gas or electricity generated from coal or nuclear. In addition to this, the amount of crude oil inventories.

Speaking in a ceremony to celebrate the national day of industry and mine, the official said that Iranian crude will be offered on the bourse and the private sector can export it. The oil market appears to have little room for error right now.

The United States is due to re-instate sanctions on Iran's energy sector after a wind-down period ends on November 4.

Oil prices also rose along with Wall Street.

The US administration has been pushing its allies to cut Iranian oil imports and encouraging Saudi Arabia, other Opec states and Russian Federation to pump more oil to meet any shortfall. Similarly, when oil prices decline, the value of the ruble falls. Restricting supplies to punish some countries pushes up oil prices for all consumers.

President Donald Trump's looming sanctions on Iran are the biggest in a series of mysteries confronting the oil market right now.

Saudi Arabia has spent decades marketing itself as a reliable oil supplier, especially to customers in Asia, and any attempt to employ the oil weapon would destroy that carefully crafted reputation. Therefore, if the U.S. develops a conflict with Saudi Arabia, it may be an important victory for Iran. The Organization of the Petroleum Exporting Countries has led cuts from major oil producers since 2017 to shore up prices.

Futures in NY headed for a 3.4 percent loss this week as government data showed USA inventories grew by more than double what analysts had forecast.

"We just have a hard time believing the Saudis can ramp up production meaningfully in the next 30 days on a sustainable basis", said Michael Tran, director of global energy strategy at RBC Capital.

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