Oil Prices Stabilise As Stock Markets Plunge

Crude oil Brent

Crude oil Brent

The contract is on course for a weekly loss of roughly 4 percent.

Brent crude futures rose 42 cents to $77.31 a barrel by 1:16 p.m. EDT (1716 GMT). "International demand and trade concerns are what the market is grabbing onto here".

US crude oil production C-OUT-T-EIA has risen steadily over the past decade and hit a record high of 11.2 million barrels per day (bpd) this month. As it was, the prices of Brent crude had gone down by nearly 5% across the week.

For the past decade, enough oil has flowed from America's shale boom to allay worries that demand for the world's most important commodity would outstrip supply.

The U.S. State Department has set November 4 as the deadline for worldwide oil buyers to stop all their oil purchases from Iran.

"We are seeing WTI crude oil prices highly correlated to the futures equity markets this week and the bearishness we are experiencing", Pawielski told UPI in an email. Companies that continue buying Iranian crude after sanctions take effect on November 4 face the risk of being cut off from the American financial system.

We've seen a fall-off in prices for the past three weeks as most visible impacts have been priced in as the fear factor subsided. The move comes as Saudi Arabia, seeking to damp a foreign-relations crisis, said this month that it would increase oil supply, pushing down prices and giving traders further options outside Iran.

Meanwhile, U.S. production is soaring, boosted by technological advances that have enabled drillers to tap shale formations, with output this year forecast to overtake the previous annual record in 1970. "Based on market fundamentals, there is absolutely no reason oil prices should be at this level", said Ali Moshiri, chairman of Amos Global Energy LLC, a Houston-based oil producer and a longtime Chevron Corp. executive.

Economic uncertainty and the woes of the Asian stock market unsettled the oil price this week to the downside.

New concerns about an oversupplied market were raised on Thursday when Saudi Arabia's OPEC governor said that the oil market could face oversupply in the current quarter. The American crude also slipped by about $1.05 and was trading at about $66.28. In 2017, exports to India accounted for 18 percent of Iran's total oil exports; Iran is India's third largest source of oil, after Iraq and Saudi Arabia.

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