USA oil inventories increase last week

Why India needs to rethink its relationship with OPEC

EIA's projection are higher than expectations from the CEO of BP, Bob Dudley, provided on October 10, just hours after Brent futures had hit a peak above $85 per barrel.

USA nuclear program-related sanctions against Iran will go in effect by November 5.

Front-month Brent crude oil futures were at $76.72 a barrel at 0320 GMT, 28 cents, or 0.4 per cent, above their last close.

Saudi OPEC governor Adeeb Al-Aama on Thursday said that the oil market could see oversupply in the fourth quarter. But the spread would narrow to 4 dollars per barrel by December 2019.

"Tariff concerns, renewed weakening in Chinese equities, emerging market worries and the ongoing investigations of the Saudi participation in the Khashoggi murder are combining to force major liquidation out of the equity space that is easily flowing into the oil complex", said Jim Ritterbusch, president of Ritterbusch and Associates in a note. The announcement included two wind-down periods.

In May, the United States announced it would withdraw from the Joint Comprehensive Plan of Action and reestablish sanctions, and on November 4, the second of two wind-down periods will end and includes measures targeting Iran's energy sector.

The outlook assumes that the effects of sanctions will increase during the first few months of full implementation.

The Joint Ministerial Monitoring Committee (JMMC), which met to review the state of the production cuts pact and the short-term prospects of the oil market, said that its review of the recent market fundamentals showed "a very comfortable supply level relative to demand".

"The market looks negative with lower numbers likely", said Robin Bieber, technical analyst at London brokerage PVM Oil. However, the response of other producers to compensate for lost supplies from Iran is also uncertain. A conflict between the two countries would potentially mean a sharp increase in oil prices as Saudi limits production.

However, global supplies appear to be adequate and inventories are rising in some regions, particularly in the United States, where oil production is near a record high.

Crude inventories rose by 6.3 million barrels in the week to October 19, compared with analyst expectations for an increase of 3.7 million barrels.

China is Iran's biggest oil customer.

Saudi Arabia said on Thursday the oil market could be shifting towards oversupply in the fourth quarter of the year as oil inventories rise and demand slows, and the top oil exporter will "mirror" such changes in its production.

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