Oil price falls further as supply worries ease

Oil price falls to $75 from high of $86

Oil prices fall on signs of rising supply, economy worries

Brent crude futures had gained 36 cents, or 0.5 percent, to $76.27 a barrel after it fell 1.8 percent on Tuesday, at one point touching their lowest since August 24 at$75.09 a barrel. Since the beginning of the week Brent fell by 6.1%, WTI - by 5.8%.

Oil is also under pressure from rising output by the world's biggest producers - Russia, the United States and Saudi Arabia - who are helping to replenish global oil inventories after more than a year of stock draws. On Tuesday, crude oil futures closed down $0.86, or 1.3%, at $66.18 a barrel.

The oil price is likely to stabilise once into 2019, according analyst at Barclays, and risks to those projections are slanted firmly to the downside but not everybody got the message as some strategist are now betting heavily on a sharp increase in prices over coming months.

After hitting a multiyear high just one month ago, USA light crude has lost almost 20 percent and has shown a pattern that hasn't been seen in some time, according to energy expert John Kilduff.

The market is growing confident output from other sources, including Saudi Arabia/Opec, Russia and the US, can offset the declines.

"I do not speak about the oil sales and the (impending U.S.) sanctions", he stressed.

The U.S. stock market lost over 2 percent in the early session resulting from warning of higher production costs by heavy equipment maker Caterpillar Inc. and disappointing operating results of industrial conglomerate 3M Corporate in the third quarter.

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According to API data, the six-week running tally of crude oil inventory gains equals 27 million barrels.

USA crude oil production reached 11.3 million barrels per day (b/d) in August 2018, according to EIA's latest Petroleum Supply Monthly, up from 10.9 million b/d in July.

On Sunday, sanctions against Iran exports are scheduled to go back into effect. Grisanti is watching for WTI to break above its 200-day moving average at $67.47 for a rebound. Then as now, traders were trying to determine OPEC and Russia's ability to steer the oil market through a challenging period.

Beyond Iran sanctions, oil output has been rising significantly in the past two months.

A Wednesday Reuters survey of OPEC production showed the group made up for declines in Iranian shipments in October by boosting production to its highest level since 2016.

USA sanctions on Iran's energy exports come into force on November 4 and it is still unclear how much the country's roughly 3.8 mln bpd production will be affected.

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