Oil manages to claw back some recent big losses

Oil rises above $80, Saudi Arabia plans output increase

Oil rises above $80, Saudi Arabia plans output increase

Traders buying on the dip following the sell-off also provided some upward jolt to the market. There were some concerns the kingdom could use oil as a "weapon" if sanctions were imposed on it by the USA and its allies as a result of the killing of the journalist Jamal Khashoggi.

Iranian Oil Minister Bijan Namdar Zanganeh shrugged off USA plans to drive the country's crude exports down to zero, saying the Islamic Republic's oil exports can not be stopped.

New US sanctions, targeting Iran's oil sector and banking, are to go into effect on November 4. Markets were unmoved after data from Baker Hughes showed that the number of U.S. drilling rigs rose by four to a total of 873, the highest since March 2015.

Saudi Arabia has 1.3 million bpd of spare capacity, said Falih, adding that UAE has assured they have over 200,000 bpd remaining.

In the United States, commercial crude inventories rose by 9.9 million barrels in the week to October 19 to 418.4 million, industry group the American Petroleum Institute said on Tuesday.

"We export as much as two barrels for any barrel that disappeared from Iran recently".

The day's earlier declines - extending a slump of 4.3 percent on Tuesday - followed a pledge from Saudi Arabia to offset any supply shortfalls and an industry report indicating an increase in USA crude stockpiles. According a Reuters source, us officials visited Sinopec in Beijing in August and demanded steep reductions of oil imports from Iran. He even said in an interview that Iraq hopes to produce 7 million bpd through the NOC and export 4 million bpd in 2019.

Crude stocks at the Cushing, Oklahoma, delivery hub rose by 1.4 million barrels, EIA said. Reports that Saudi Arabia has the ability to ramp up production "is generally negative".

Saudi Arabia faces hostility in the wake of the Khashoggi affair, while Russian Federation has been roiled by the USA sanctions on Moscow in the wake of Moscow's intervention in Crimea and Ukraine.

On Sunday, Saudi Arabia described the deeply shocking incident as a "huge and grave mistake", as it attempts to clear crown prince Mohammed bin Salman of any responsibility.

China's economy Investor focus shifted to US-China relations and the ongoing Sino-US trade war.

The U.S. Energy Department said gasoline stocks fell 4.8 million barrels to 229.3 million barrels last week, the lowest since December 2017. Weakness in equities has also weighed on crude.

As for the worldwide furor over Khashoggi's death in the Saudi embassy in Turkey that the kingdom insists was the result of a fistfight gone awry, Falih said, "This incident will pass; but Saudi Arabia is a very responsible country, for decades we used our oil policy as [a] responsible economic tool and isolated it from politics".

In addition, trade press reports indicate that Saudi Arabia is offering sales of Khuff condensate.

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