Oil Prices Fall To Two-week Lows

Oil prices drop after IMF's review of global economic growth

Oil prices rose about one percent on Tuesday on growing evidence of falling Iranian crude exports before the imposition of new USA sanctions, as well as a partial production shutdown in the Gulf of Mexico because of Hurricane Michael.

Again, U.S. West Texas Intermediate (WTI) crude was down by 41 cents, also about half a percent, to 74.55 dollars a barrel, after rising almost 1 percent in the previous session.

The U.S. WTI (West Texas Intermediate) crude futures surged by 41 Cents or 0.5% and were at $74.70 a barrel.

Almost 40 percent of daily crude oil production and more than one-third of natural gas output was lost from offshore U.S. Gulf of Mexico wells on Wednesday because of platform evacuations and shut-ins ahead of Hurricane Michael.

The crude oil inventories of the United States was up 6.0 million barrels for the week ending October 5.

Recently, the US levied new economic sanctions against Iran, causing a drop in oil output there.

The red-hot oil market cooled this week, as a stock market sell-off weighed on both WTI and Brent crude prices after they hit multi-year highs last week.

Opec cut its estimate for global demand for its crude next year due to weakening economic growth and higher output from rivals, such as United States shale drillers.

OPEC said its own production rose by 132,000 bpd in September to 32.76 million bpd, the highest according to the monthly report since August 2017. At the same time, it added 200,000 barrels a day to its estimate for non-OPEC supply this year as the U.S., Canada, Kazakhstan and Brazil grow faster than expected.

In addition to shutting in wells, oil producers also halted most offshore drilling operations by evacuating three drilling rigs and moving eight others out of the storm area, BSEE said.

"Upcoming US sanctions against Iran already caused the country's output to drop by 350 thousand barrels per day (mbpd) in September", according to Fitch. Analysts polled by S&P Global Platts expect the EIA to report a climb of 1.61 million barrels in crude supplies. Crude could be US$5 to US$10 lower by January, he said.

Energy hungry India now imports more than 82 percent of crude oil for its domestic requirement and about 62 percent of its (Indian) oil imports come from Saudi Arabia and other middle eastern countries like Iran, Iraq and Kuwait.

The cartel believed that the slowing economic growth and the increase of the world oil supply, led by the U.S. shale output rise are the reasons of oil demand decrease.

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