Oil prices rise towards $85 on surprise drawdown in U.S. crude stockpiles

Committed to meet India's oil demand: Saudi Energy Minister

The increase in U.S. crude oil stocks worked to push the price of oil lower, as it showed a larger-than-expected rise at a time when fears are rising that oil stocks will decline in the coming months, once the November implementation of the USA sanctions on Iranian oil exports is fully in place.

The West Texas Intermediate for November delivery rose 0.44 USA dollar to settle at 71.78 dollars a barrel on the New York Mercantile Exchange, while Brent crude for December delivery added 0.35 dollar to 80.78 dollars a barrel on the London ICE Futures Exchange. The global benchmark, which hit a more than two-week low late last week as equity markets dropped, is trading around $5 below a four-year high of $86.74 marked on October 3. Even after the kingdom dialed back on flows to the U.S. last year in an attempt to draw down U.S. crude inventories (a very successful attempt, I hasten to add), we have seen U.S. imports of Saudi crude rise for four consecutive months since May of this year - coinciding with the unwinding of the OPEC production cut deal.

In other oil-related news, a monthly report from the Energy Information Administration on Monday projected crude output from seven major USA shale plays would rise 98,000 barrels a day in November to 7.714 million barrels a day.

Whether it's the need he's created for replacement supplies from Iran, or other actions by the USA president, Trump's policies are now having a direct impact on where oil is flowing, said Eugene Lindell, an analyst at JBC Energy in Vienna. Deliveries of Saudi crude to the Port Arthur refinery, the largest in the USA, have accounted for almost 28 percent of Saudi barrels to the US this year, up from 20 percent in 2017.

As announced by the USA authorities, on November 4 they will implement new sanctions against Iran, including restrictions on crude exports.

He said he had told the Indians "consistently that on November 4 the sanctions will be enforced and that we will consider waivers where appropriate".

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Saudi Arabia said it would retaliate to any action against it over the Khashoggi case, state news agency SPA reported on Sunday, quoting an official source.

Oman was the talk of one of the oil market's biggest gatherings last month, as its crude surged past $90 a barrel.

The minister said India's accelerated economic growth is playing a major role in rebalancing the distribution of global economic growth.

Gasoline stocks dropped by 3.4 million barrels, compared with analyst expectations in a Reuters poll for a 1.1 million-barrel decline.

Since the oil embargo of the 1970s, Saudi Arabia has avoided threats to use its "oil weapon" in diplomatic affairs, insisting that it favors stable markets and separates oil and politics.

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