(Bloomberg) — Oil traded near the lowest level in a month after a bigger-than-expected gain in American stockpiles overshadowed tensions between the U.S. and Saudi Arabia over a missing critic of the kingdom.
Futures in New York fell 0.8 per cent, after plunging three per cent Wednesday. U.S. crude inventories rose 6.49 million bbls last week, the Energy Information Administration reported, more than twice the amount forecast in a Bloomberg survey. Even as the disappearance of dissident writer Jamal Khashoggi kept the market on edge, President Donald Trump cautioned against putting the entire U.S.-Saudi relationship at risk .
Crude bumped higher earlier this month as uncertainties persisted over whether the Organization of Petroleum Exporting Countries and its partners can offset supply losses from Iran after U.S. sanctions start in November. The gains were supported by tensions after Trump pledged “severe punishment” should the Saudis be linked to Khashoggi’s disappearance. Still, expanding America stockpiles and concerns over demand have pegged prices back from a four-year high.
“Stocks are rising in the U.S., and the reason is because pipes out of the U.S. for exports are maxed out while U.S. production is rising,” said Bjarne Schieldrop, Oslo-based chief commodities analyst at SEB AB.
West Texas Intermediate for November delivery traded 56 cents lower at $69.19/bbl on the New York Mercantile Exchange at 10:15 a.m. in London. The contract declined $2.17 to $69.75 on Wednesday. Total volume traded Thursday was about 20 per cent above the 100-day average.
Brent for December settlement was 72 cents lower at $79.33/bbl on the London-based ICE Futures Europe exchange. The global benchmark was at a $10.16 premium to WTI for the same month, after settling at the highest level since June 11 on Wednesday.
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