Oil prices dropped on Thursday morning in Asia from four-year highs in the previous session. The U.S. crude inventories were reported to rise, while Russia and Saudi Arabia had a private deal in September to raise oil production.
Crude Oil WTI Futures for November delivery edged down 0.21% to $76.27 per barrel at 11:09PM ET (03:09 GMT) on the New York Mercantile Exchange, while Brent Oil Futures for December delivery also slumped 0.15% to $86.16 a barrel on London’s Intercontinental Exchange.
U.S. crude inventories surged by around 8 million barrels last week to about 404 million, marking the largest rise since March 2017, according to Energy Information Administration data on Wednesday. The country’s crude oil production remained at a record 11.1 million barrel per day.
“Data for last week showed a much more significant than expected…build in U.S. commercial crude [inventories], which generally suggests that oil prices should tumble,” said Stephen Innes, head of trading for Asia-Pacific at Oanda.
After OPEC had a meeting in September and decided not to raise output, its de facto leader Saudi Arabia struck a private deal to grow their oil production from September through December as crude goes toward $80 a barrel.
This comes after U.S. President Donald Trump blamed OPEC for high crude prices and urged the members to boost output to drive down the fuel costs.
According to a Reuters source, “The Saudi minister told [U.S. Energy Secretary Rick] Perry that Saudi Arabia will raise output if its customers asked for more oil.”
Elsewhere, shipments of U.S. crude oil to China have been halted, the president of China Merchants Energy Shipping Co. (CMES) said on Wednesday, as the trade war between the two intensifies.
“We are one of the major carriers for crude oil from the U.S. to China. Before [the trade war] we had a nice business, but now it’s totally stopped. It’s unfortunately happened, the trade war between the U.S. and China. Surely for the shipping business, it’s not good,” Xie Chunlin, the president of CMES said.
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