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Energy | Oil | Oil Price Report: Oil slides as Saudi supply rebound weighs

3 minutes - Source: CNBC




GP: Oil tank North Dakota 190926
Photo taken August 19, 2013 shows a worker checking oil tanks at an oil well near Tioga, North Dakota.
Karen Bleier | AFP | Getty Images
Oil fell on Thursday for the third straight day as Saudi Arabia’s moves to restore output quickly after attacks on its oil installations promised yet more oil supply.
Brent crude futures were down 72 cents, or 1.1%, at $61.67 a barrel.
U.S. West Texas Intermediate (WTI) crude futures fell 79 cents, or 1.4 percent, to $55.70 a barrel.
“There has been not much joy for oil bulls in recent days as either sluggish stock market performance, recovering Saudi oil production or unexpectedly disappointing U.S. inventory data hindered any attempt to push prices higher,” Tamas Varga of oil brokerage PVM said.
Prices were weighed down by the faster-than-expected recovery of Saudi output after the drone and missile strikes on two of its oil-processing plants, as well as a surprise 2.4-million-barrel build in U.S. crude inventories last week.
The world’s top oil exporter has restored its production capacity to 11.3 million barrels per day, sources briefed on Saudi Aramco’s operations told Reuters.
But U.S. President Donald Trump on Wednesday signalled that a resolution to the trade dispute with China might be near, which could eventually boost fuel demand. A day after delivering a stinging rebuke to China over its trade policies, Trump said Beijing wanted to make a deal and it “could happen sooner than you think”.
Trump and Japanese Prime Minister Shinzo Abe also signed a limited trade deal that would open Japanese markets to $7 billion of U.S. products annually.
“The oil market has seemingly returned to business as usual,” said Norbert Ruecker, head of economics and next-generation research at Julius Baer. “Instead of the attack-related fallout including disruption and geopolitical risks, the soft economy and stagnant oil demand are back in focus.”
Crude futures were pressured by sluggish economic data in leading European economies and Japan. A firmer dollar, which registered its sharpest daily gain in three months overnight and held steady in Asian trade, also weighed on oil as it makes dollar-traded fuel imports more costly for countries using other currencies.
“There’s not too much to be cheery about on oil markets today,” said Jeffrey Halley, senior market analyst for Asia Pacific at OANDA. “Barring new inputs to adjust price expectations, both contracts are in grave danger of fully unwinding their Saudi attack rallies and retesting their pre-attack lows, around $60.00 (for Brent) and $54.00 (for WTI).”

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