Oil falls after Saudi Arabia reassures market on supply

US issues warning to Russia about helping Iran escape upcoming oil sanctions

"Now, we have to wait and see if this continues to spiral out of control", said Mr Gene McGillian, vice-president of market research for Tradition Energy in Stamford, Connecticut. "Two of our oil companies have made nominations to purchase Iranian oil in November".

Falih added that the Saudis would soon raise output to 11 million barrels per day (bpd) from the current 10.7 million, and that it was possible to increase further to 12 million bpd.

Uncertainty over future Iranian exports remains high.

The United States has recently hinted that it was at least considering waivers, but U.S. Treasury Secretary Steven Mnuchin said over the weekend that it would be more hard for Iranian oil customers to get waivers from the sanctions than it was during the Obama administration, and the United States would issue waivers, if any, only to buyers that have significantly reduced Iranian purchases.

The new Saudi stance on supply, along with a fifth-weekly build in USA crude stockpiles anticipated for last week and a global stock market rout, hammered oil prices down almost 5% on the day.

Brent for December settlement fell $3.39, or 4.3%, to settle at $76.44 a barrel on the London-based ICE Futures Europe exchange.

Traders have pointed to a broader selloff in equity markets as putting pressure on oil prices, spurring concerns about sluggish global economic growth.




Top crude oil exporter Saudi Arabia has pledged to keep markets supplied despite its increasing isolation over the killing of Saudi journalist Jamal Khashoggi.

In relevant remarks earlier this month, Iranian Foreign Ministry Spokesman Bahram Qassemi said the country has launched talks with other nations and already formulated the necessary mechanisms to foil the United States attempts at bringing Iran's oil exports to zero with new sanctions. "That policy has been consistent for many years", Falih said.

OPEC still hasn't revived output to what it was producing prior to the 2017 cuts.

KSA now holds the biggest spare capacity of about 2 million barrels, which can be used when required.

Meanwhile, Russia's oil production is now 150,000 bpd higher than the October 2016 level, the baseline for the global oil production deal, TASS news agency quoted Energy Minister Alexander Novak as saying.

"Brent and WTI got caught up in the risk-off markets and the API release later in the day didn't offer any chance of reprieve as it reported a huge build of 9.88m barrels, against expectations of a much smaller increase". Meanwhile, supplies at the key storage hub in Cushing, Oklahoma, likely increased 1.5 million barrels last week, according to a forecast compiled by Bloomberg. Iran is the third-largest producer in the Organization of the Petroleum Exporting Countries and China is the biggest buyer of its oil.

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