Oil prices fall on signs of rising supplies

Oil price falls to $75 from high of $86

The administration official told Bloomberg that waivers were aimed at preventing oil price hikes and would be granted in exchange for continued import cuts.

In Friday trading, Brent crude was priced above US$72 with WTI (West Texas Intermediate) holding above US$63 a barrel. It hit a two-month low of $65.33 a barrel on Tuesday.

Analysts believed that the supply increase has offset the negative impact and declines in Iranian shipments caused by new US sanctions on Iran to be effective on November 4.

President Donald Trump has discussed global crude oil prices with Saudi King Salman in a telephone call amid the American leader's call for OPEC to bring down energy prices.

So, the market is betting on supply that may be there later but it is clear that it is not here now.

Oil production from these three producers reached 33 million barrels per day (bpd) for the first time in September, Refinitiv Eikon data showed.

Both countries have agreed to replace oil production lost from the market because of the USA sanctions against Iran but should political concerns mean the two prefer to see prices higher next year, then Barclays' forecast would prove too low.

The supply surge is increasingly finding a home overseas, as USA refiners reach the maximum they can handle of the light, low-sulfur oil coming from shale plays.

Meanwhile, Russia raised crude and condensate output to a record of nearly 11.41 million barrels a day in October, according to a government official, who asked not to be identified.

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The summer driving season usually leads to higher consumption of gasoline in the United States for domestic travel, while the early fall is instead a period marked by refinery maintenance, all of which reduces oil consumption.

Front-month Brent crude futures were at $73.04 per barrel early on Friday, up 15 cents, or 0.2%, from their last close.

A report released by the American Petroleum Institute on Tuesday showed USA crude supplies rose by 5.7 million barrels last week, more than analyst forecasts for a 4.1 million-barrel build.

Benchmark Brent crude now trades above $80 a barrel.

However, with last week's increase turning out to be less than expected, oil's fall was somewhat limited.

Benchmark Brent crude oil was still down 10 cents at $75.81 US, reversing some of its earlier losses. EIA also forecast that total global liquid fuels inventories to decrease by 200,000 barrels per day in 2018, followed by an increase of 280,000 barrels per day in 2019. Saudi Arabia and Russian Federation have said they will pump enough to meet demand once US sanctions are imposed. Oil has become a risk-off trade and is being negatively impacted by the same factors hurting stocks, including worries of a global economic slowdown, the Federal Reserve tightening its policies, trade concerns and rising dollars.

However, U.S. equities rebounded strongly on Thursday, with the Nasdaq Composite Index jumping about 3 percent in late trading, soothing anxious investors to some extent.

Thus, the cost of the futures on Brent crude rose by 0.63%.

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