Oil prices edge up on surprise drawdown in United States crude stockpiles

Oil prices edge up on surprise drawdown in United States crude stockpiles

Oil futures finished higher on Tuesday, with global benchmark prices leading the climb as traders waited to see if relations between the USA and Saudi Arabia sour further following the disappearance of a journalist in Turkey.

The United States added another 6.5 million barrels to its stockpiles last week, sending crude oil prices tumbling despite concerns about relations with Saudi Arabia.

USA crude inventories fell by 2.1 million barrels last week, compared with analyst expectations for a build of 2.2 million barrels, American Petroleum Institute data showed after Tuesday's settlement.

While such a declaration “may do little to quiet widespread suspicion that Crown Prince Mohammed bin Salman was behind an assassination plot, it could leave enough room for the USA and others to generally maintain diplomatic ties with the Saudi government, ” said Robbie Fraser, commodity analyst at Schneider Electric, in a note.

Brent crude was down $1.38, or 1.7 percent, at $80.02 a barrel, after gaining $1.15 over the previous three sessions. Meanwhile, crude oil imports into the USA, averaged around 7.6 million barrels per day, up around 218,000 per day from the previous week. Last week, Pradhan said Indian Oil Corp (IOC) and Mangalore Refinery and Petrochemicals (MRPL) have together placed orders for import of 1.25 MT of crude oil from Iran.

Inventories rose sharply even as US 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.

"One can not keep the (oil) price low with slogans and bullying", Zanganeh added.

The Iranian official, in turn, said the Islamic Republic expects South Korea as one of its key business partners to continue its operation in Iran in the situation created by the United States sanctions.

Inventory data from the U.S. Energy Department's Energy Information Administration is due on Wednesday.

OPEC, Russia and other oil producers, such as US shale companies, had increased production sharply since May, the IEA said, raising world crude output by 1.4 million barrels per day (bpd). The market has been supported by reports that Iranian crude exports may be falling faster than expected ahead of November 4, the date U.S. sanctions on the commodity are due to start.

Crude oil futures for November delivery ended down $2.17, or 3%, at $69.75 a barrel, the lowest settlement in a month.

The diplomatic crisis over Saudi Arabia's alleged involvement in the disappearance of journalist Khashoggi could affect oil prices, too. Iran has exported 1.33 million barrels per day (bpd) to a few countries including India and China in the first two weeks of October, according to Refinitiv Eikon data.

U.S. President Donald Trump said the Saudi crown prince intends to expand an investigation into the disappearance of Khashoggi and that the prince did not know what happened in the Turkish consulate where Khashoggi apparently disappeared.

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