Crude oil prices fell Wednesday after Energy Information Administration data showed a third straight week of higher U.S. crude inventories, adding to worries about an oversupplied market as weak economic data in the U.S. depressed global markets.
Brent crude futures Wednesday were down 2.3%, at $57.51 a barrel. U.S. West Texas Intermediate crude futures fell 1.8%, to $52.64/Bbl, Kallanish Energy reports.
The U.S. stock market fell more than 1% for the second straight session, with stocks hitting a fresh one-month low, as September’s weak private payrolls report added to concerns of a slowdown in the world’s largest economy.
U.S. crude oil inventories rose by 3.1 million barrels last week, the Energy Information Administration said, compared with analyst expectations for an increase of 1.6 million barrels.
Crude stocks at the Cushing, Oklahoma, delivery hub for WTI, fell by 201,000 barrels, EIA said.
U.S. manufacturing activity dropped to a 10-year low as U.S.-China trade tensions weighed on exports.
Signs of easing geopolitical tensions in the Middle East also impacted prices. Tensions between Saudi Arabi and Iran rose after Saudi Arabia blamed Iran for an attack on Saudi oil facilities on Sept. 14., a charge Tehran denies.
Iran’s Oil Minister Bijan Zanganeh sought to defuse tensions with Saudi Arabia, calling his counterpart in Riyadh “a friend” and saying Tehran was committed to stability in the region.
Both oil ministers from Iran and Saudi Arabia, which have repeatedly clashed at Opec meetings over output policies, were attending a top Russian energy conference chaired by president Vladimir Putin, Reuters reported.
Putin said Russia would continue to be a responsible player in the alliance between Opec members and 10 non-Opec oil-producing nations known as Opec+, which has since Jan. 1 implemented a deal to cut output by 1.2 million barrels per day until March 2020.
The Russian president said it was important to use all available tools to balance the energy markets, Reuters reported.
Iran’s oil minister also said he expected a slight surplus on the oil supply side next year.
The United Arab Emirates’ minister of Energy and Industry Suhail al-Mazrouei said Opec and its allies were monitoring global oil markets, and that conformity levels were the same as previously announced at the last Opec+ joint ministerial monitoring committee meeting.
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