Crude oil slightly higher as Hurricane Michael approaches Florida

A worker walks down the stairs of an oil tank at Turkey's Mediterranean port of Ceyhan

A worker walks down the stairs of an oil tank at Turkey's Mediterranean port of Ceyhan

Despite the fall in output, US crude futures settled down more than 2 percent at $73.17 per barrel on Wednesday, tracking the weaker USA stock market and reflecting the declining importance of Gulf of Mexico output due to burgeoning growth from onshore shale fields.

According to the outlook, Brent crude oil spot prices will average 74 USA dollars a barrel in 2018 and 75 dollars a barrel in 2019.

Brent crude futures rose $1.09 to settle at $85.00 a barrel, a 1.30 percent gain.

Oil prices have rallied this year as market watchers expect that United States sanctions on Iran, OPEC's third-largest oil producer, will reduce oil supplies.

Wednesday's cuts represent about 6.5 percent of the nation's daily output of 11.1 million barrels of crude.

Iran's crude exports fell further in early October as buyers sought alternatives ahead of US sanctions that take effect on November 4, according to tanker data and an industry source.

Figures released Thursday by the U.S. Energy Information Administration revealed crude inventories climbed by six million barrels in the week leading up to October 5, compared with analyst expectations for an increase of 2.6 million barrels.

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The report also put average Iranian heavy crude price at $68.70 since beginning of 2018 up to the report's publishing day.

Shipments into the country last month totalled 37.12 million tonnes, or 9.05 million barrels per day (bpd), up from 9.04 million bpd in August and their third straight monthly rise.

The monthly report of the Organization of the Petroleum Exporting Countries (OPEC) said in its latest report that the world oil demand growth is to decline to 1.36 million barrels a day in 2019 from 1.54 million barrels a day this year, Xinhua reported.

Iran has questioned whether the market needs more oil and says its output is holding steady at about 3.8 million bpd. As the U.S. -China trade tensions escalate, investors are shunning risk assets from equities to oil on fears over slowing growth.

"The oil market cannot shield itself from the rout in equity markets", said Norbert Ruecker, head of macro and commodity research at Julius Baer Group Ltd.in Zurich.

Opec's outlook comes amid pressure on the cartel to pump more to offset any impact from Iranian sanctions and calls from US President Donald Trump to boost output. However, Gulf production cuts have been less of an impact on supplies with the rise of USA shale oil.

Southern Co kept the two reactors at its 1,751-megawatt Farley nuclear power plant in Alabama reduced at around 30 percent early Thursday.

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