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American Oil Cloth Oil Has Both Dropped By More Than 4%. Saudi Minister: Increase Production!
- Oct 24, 2018 -

Sino-Singapore Jingwei Client, Oct. 24, International oil prices fell sharply on Tuesday, with U.S. crude oil futures falling 5.2% to $65.74, the lowest since August 20. Foreign media analysts believe that Saudi energy minister Falih announced that he would increase production again, and the global stock market slump dragged down the trend of oil prices.

As of the end of the day, US crude oil futures fell 4.22%, to 66.43 U.S. dollars / barrel. Brent crude futures fell 4.25%, to 76.44 U.S. dollars / barrel, the lowest since September 7th.

Oil prices plunged nearly 5% to a two-month low on Tuesday as concerns about demand growth were raised by a sell-off in global stock markets, Reuters reported. Previously, Saudi Arabia said it could increase crude oil supply quickly if necessary, alleviating U.S. supply concerns before sanctions against Iran came into effect.

"(Oil prices) have fallen to an alarming extent, but in today's global trading, there are already more days than before. Now we have to take a wait-and-see attitude to see if this situation will continue to evolve into a runaway state, "said Michael Gillian, a traditional energy analyst in Connecticut.

In addition, traders said that if U.S. crude oil prices fell below the important psychological barrier of $65, may trigger more technical selling.

Reuters also reported that oil prices followed the early decline in U.S. stocks, as investors fled the stock market amid worries about corporate earnings growth and Italian budget worries. MSCI's global market index fell more than 2%, hitting its lowest level since September 2017.

Saudi energy minister Falih called the oil market "in good shape" at a meeting in Riyadh on Tuesday. He said Saudi Arabia hopes the Organization of Petroleum Exporting Countries (OPEC) and other oil-producing countries will sign an agreement in December to expand cooperation in monitoring and stabilizing the oil market.

"We will decide whether there will be supply disruptions, especially in the context of the impending Iranian sanctions," Falih said. "Then we will continue to maintain the current idea of meeting any future demand to ensure customer satisfaction."

Falih said that does not rule out the possibility of future Saudi crude oil production than the current level of 1-2 million barrels per day higher.

The report points out that the US sanctions against Iran's oil industry will come into effect in November 4th. The U.S. government has said it wants to block all Iranian fuel exports, but other oil-producing countries are increasing production to fill any possible supply gap.

The report also said that the market had been worried that Saudi Arabia may cut the supply of crude oil in retaliation for the possible sanctions for the killing of Saudi journalist Kashuji. He said on Monday that Saudi Arabia had no intention of doing so.