Oil Prices Drop on Larger-than-expected U.S. Crude Stocks

Investing.com – Oil prices extended losses on Thursday morning in Asia after a report showed larger-than-expected crude stocks in the U.S.

Also affecting the market were ongoing jitters over the disappearance of Washington Post journalist Jamal Khashoggi and the impact of the disappearance on relations between the U.S. and Saudi Arabia.

for November delivery edged down 0.11% to $69.67 per barrel by 11:13PM ET (03:13 GMT) on the New York Mercantile Exchange, falling below the $70 mark for the first time in about a month. for December delivery lost 0.1% to $79.97 a barrel on London’s Intercontinental Exchange.

The U.S. Energy Information Administration said on Wednesday that U.S. crude stocks surged by 6.5 million barrels last week, marking the fourth straight week of increases. Exports fell to 1.8 million bpd.

The increase in inventories offset a slip in U.S. crude production of 300,000 bpd to 10.9 million bpd over the same period after some of the offshore facilities were shut down for Hurricane Michael.

“A tick higher in refining activity and a drop-in production due to hurricane activity in the Gulf was not enough to halt a fourth consecutive climb in stocks,” Matt Smith, director of commodity research at ClipperData, told Reuters.

Separately, major oil producer and exporter Saudi Arabia is under international pressure due to its alleged involvement in the disappearance of Khashoggi, who went missing after entering the country’s consulate.

U.S. President Donald Trump asked Turkey for an audio recording of Khashoggi’s death, which Turkey claimed to have already sent to the U.S.

On Wednesday, Trump said, “We’ve asked for it…if it exists…I’m not giving cover at all. And with that being said, Saudi Arabia has been a very important ally of ours in the Middle East. We are stopping Iran.”

The Turkish government leaked evidence, cited by the New York Times on Wednesday, about Khashoggi being tortured at the consulate. The evidence supposedly suggests the journalist was beaten, beheaded and his body was dismembered. If the evidence is confirmed, it could drive up the international political tensions.

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