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US Crude Falls on Weekly Supply Build, Iran Sanctions

Summary:
Crude oil futures are tumbling midweek, driven mainly by the US government reporting a supply increase and the White House slapping additional sanctions on Iran. Crude prices had been surging by as much as 7% in the last few sessions, buoyed by the incident in Saudi Arabia, but they have pared their gains in the last two days. October West Texas Intermediate (WTI) crude futures slumped %excerpt%.68, or 1.15%, to .66 per barrel at 15:22 GMT on Wednesday on the New York Mercantile Exchange. Year-to-date, US crude is up nearly 28%. Brent, the international benchmark for oil prices, is also sliding in the middle of the trading week. November Brent crude futures shed %excerpt%.37, or 0.57%, to .18 a barrel on London’s ICE Futures exchange. Brent prices are up more than 18% so far this year. According

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Crude oil futures are tumbling midweek, driven mainly by the US government reporting a supply increase and the White House slapping additional sanctions on Iran. Crude prices had been surging by as much as 7% in the last few sessions, buoyed by the incident in Saudi Arabia, but they have pared their gains in the last two days.

October West Texas Intermediate (WTI) crude futures slumped $0.68, or 1.15%, to $58.66 per barrel at 15:22 GMT on Wednesday on the New York Mercantile Exchange. Year-to-date, US crude is up nearly 28%.

Brent, the international benchmark for oil prices, is also sliding in the middle of the trading week. November Brent crude futures shed $0.37, or 0.57%, to $64.18 a barrel on London’s ICE Futures exchange. Brent prices are up more than 18% so far this year.

According to the US Energy Information Administration (EIA), domestic crude stockpiles climbed 1.1 million barrels for the week ending September 13. The market had forecast a decline of two million barrels. Distillate inventories jumped by 400,000 barrels, while gasoline supplies surged 800,000 barrels.

The US Baker Hughes total oil rig count clocked in at 733, down from 738 in the previous week.

President Donald Trump confirmed on Twitter that he ordered Treasury Secretary Steven Mnuchin to “substantially increase” sanctions on Iran. This comes days after the president tweeted that the US was “locked and loaded” to respond to the attack on Saudi Arabia’s crude-processing and oil field. Crude prices had surged the most in history after the kingdom slashed output in half following the attack.

While the US government has blamed the Tehran regime for the drone attack, President Hassan Rouhani has denied responsibility and noted that the attacks on Aramco were potentially blowback for the aggression on Yemen.

Saudi Minister of Energy Abdulaziz bin Salman announced that production capabilities were fully restored and that output would return to pre-attack levels by the end of the month to 10 million barrels per day (bpd). So far, more than half of the output loss has been restored in the last two days. It is expected to climb to 12 million bpd by the end of November.

It is estimated that the disruption accounted for 5% of global production.

In other energy markets, November natural gas futures slipped $0.03, or 1.12%, to $2.63 per million British thermal units (btu). November gasoline futures dipped $0.01, or 0.6%, to $1.66 a gallon. November heating oil futures were flat at $1.98 per gallon.

If you have any questions and comments on the commodities today, use the form below to reply.


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Andrew Moran
I am a full-time professional writer. Prior to my self-employment, I worked as a reporter for Digital Journal covering the politics beat and The Toronto Times reporting on the city’s entertainment scene. I currently write mostly about business, marketing and finance

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