Published: Sun, October 14, 2018
Markets | By Otis Pena

Oil Prices Fall To Two-week Lows

Oil Prices Fall To Two-week Lows

LONDON, Oct 10 (Reuters) - The world's biggest trading houses said on Wednesday they saw oil prices not falling below $65 per barrel and possibly breaking above $100 next year as us sanctions on Iran reduce crude exports from the Islamic republic.

OPEC Secretary-General Mohammad Barkindo said on Thursday that oil producers are very concerned about spare output capacity amid a reduction in energy-industry investment.

Iran reported September production of 3.76 million barrels a day, a month-over-month drop of 51,000 barrels, and Venezuela reported a drop of 14,000 barrels to a total of 1.43 million barrels a day.

Oil prices have rallied this year on expectations that US sanctions on Iran will strain supplies by lowering shipments from OPEC's third-largest oil producer. The American Petroleum Institute reported that USA crude supplies rose 9.7 million barrels for the week ended October 5, according to sources.

But supply concerns are keeping the market on edge.

The Organisation of the Petroleum Exporting Countries (OPEC) cut its forecast of global demand growth for oil next year for a third straight month, citing headwinds facing the broader economy from trade disputes and volatile emerging markets.

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Saudi Arabia traditionally has been India's top oil source but in the April-January period of 2017-18, Iraq dethroned it, supplying 38.9 million tonnes (MT) of oil, India's Oil Minister Dharmendra Pradhan has said recently.

Oil prices gave back early gains and turned lower on Friday after the International Energy Agency (IEA) deemed supply adequate and the outlook for demand weakening, sinking even as equities rebounded from a slump Thursday. "The market remains well supplied". The IEA said the market looked "adequately supplied for now" and trimmed its forecasts for world oil demand growth this year and next. Both US and European trading volumes accelerated relative to the previous session and compared to 30-day averages.

"There is no cause for alarm", Barkindo said at the Oil and Money conference in London.

Oil headed for the biggest two-day drop since July, with fuels from diesel to gasoline also declining as fears over a worsening trade war rattled markets across the board.

Stockpiles of crude and refined products in industrialized countries rose by 14.2 million barrels in August, a second consecutive monthly increase.

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