Saudi oil output expected to rise next month: Falih

Oil pares losses as focus returns to Iran sanctions

Oil pares losses as focus returns to Iran sanctions

Benchmark Brent crude has been trading above $80 a barrel LCOc1.

News reports and Iranian government documents indicate that Iran has in some cases lowered prices and offered discounts to maintain sales as sanctions loom.

The oil exchange is a mechanism that attempts to sidestep the US sanctions, which are being reimposed following the USA withdrawal from the nuclear deal, by allowing private companies to buy the crude at auction in Tehran and then resell it privately on the open market.

Oil prices fell on Wednesday, with USA futures slipping below $70 a barrel for the first time in a month, after US stockpiles rose by 6.5 million barrels, nearly triple what analysts had forecast, while exports dropped.

"Shale oil production continues unabated in the United States", said Carsten Fritsch, commodities analyst at Commerzbank.

The secretary general of the Organization of the Petroleum Exporting Countries last week said that the group saw the oil market as well supplied and that it was wary of creating a glut next year.

Saudi Arabia has the capacity to produce 12 million bpd and is now producing 10.7 million bpd, Falih said, adding that production will rise further next month.

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The largest change is forecast in the Permian Basin of Texas and New Mexico, where output is expected to climb by 53,000 bpd to a new peak of 3.55 million bpd. But infrastructure has not kept pace with rising output, filling domestic tanks.

India is the world's third biggest oil consumer and importer.

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.

And we have seen sanctions on Iran.

In the first week of October, Iran's crude exports averaged 1.1 million barrels per day, according to Refinitiv Eikon, an industry source of data on tanker traffic.

Saudi Arabia has denied it was responsible for the disappearance of Khashoggi.

U.S. President Donald Trump can not bring oil prices down by "bullying" other nations, Iran's oil minister said on Tuesday, adding that the market was suffering from short supply. Senior officials on Monday had said that Indian oil companies have optional volumes built in their annual crude oil purchase contracts with suppliers like Saudi Arabia and Iraq that will be more than enough to make up for any shortfall in supplies from sanctions-hit Iran.

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