Oil slips from four-month highs on economic concerns

Oil slips from four-month highs on economic concerns

Oil prices rose on Wednesday after a report of a decline in United States crude inventories and looming sanctions against Iran raised expectations of tightening supply, while top producer Russian Federation warned of a fragile global market.

West Texas Intermediate for October delivery traded at $69.91 a barrel on the New York Mercantile Exchange, down 46 cents, at 11:53am in Singapore.

The increases extended a more than 2 percent climb in both crude benchmarks the previous session.

Brent for November settlement lost 93 cents to $78.81 a barrel on the ICE Futures Europe exchange after rising above $80 for the first time since May 22 on Wednesday. Brent crude, the global benchmark, fell $1.56, or 2%, to $78.18 a barrel to end a four-session winning streak.

"This is huge uncertainty on the market - how the countries, which buy nearly 2 million barrels per day of Iranian oil will act".

The deliberate spike in production was prompted by concerns about global supply and US sanctions against Iran that go into effect in November.

US production has returned to 2014 boom levels, but the energy agency said USA output will grow more slowly next year due to bottlenecks in getting oil to markets.

"According to Bloomberg, in case the Iran sanctions come into place, oil price could go up to $150 a barrel", reported ET.

Global oil output hit a record of 100 million barrels per day in August, but the market may tighten and prices rise as exports from Iran and Venezuela decline, the International Energy Agency said Thursday. "The situation in Venezuela could deteriorate even faster, strife could return to Libya and the 53 days to November 4 will reveal more decisions taken by countries and companies with respect to Iranian oil purchases", the IEA said, referring to the day USA sanctions on Iran take effect.

"Things are tightening up", said the Paris-based IEA, which advises most major economies on energy policy.

Novak said global oil markets were "fragile" due to geopolitical risks and supply disruptions.

Oil prices rose on Tuesday as the U.S. Energy Information Administration (EIA) lifted oil-price forecasts and lowered U.S. crude output expectations.

"But we are clear that these are commercial decisions-dependent on how competitively oil is priced and on the requirements of our refineries", said the official.

OPEC said the world will need 32.05 million bpd from its 15 members in 2019, unchanged from last month.

While US policy on sanctions against Iran has helped to support the oil price in recent weeks, its trade wars with China and Turkey are competing as a downward drag on the market.

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