Oil prices slump after large build in US stockpiles

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USA crude imports from Saudi Arabia reached 1.1 million barrels per day last month, a sixteen-month high.

Brent rose 64 cents per barrel to $81.42, while West Texas Intermediate rose 14 cents to settle at $71.92.

The rise, reported by the US Energy Information Administration was nearly triple what analysts had forecast and further eased prices, which had hit four-year highs of $86.74 earlier this month. On Monday, officials in the government and oil companies said Indian firms like International Olympic Committee have optional volumes built in their annual crude oil purchase contracts with suppliers like Saudi Arabia and Iraq that will be more than enough to make up for any shortfall in supplies from sanction-hit Iran.

On Tuesday, the American Petroleum Institute reported a decline of 2.1 million barrels in crude inventories.

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.

Oil had been rising on worries about Iranian sanctions and tensions between the United States and Saudi Arabia after the death of Saudi journalist Jamal Khashoggi.

"The oil price pain being now felt would have been much worse if we had believed people who 4-5 years ago said that oil demand had peaked and would decline", Mr. Al-Falih added.

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Meanwhile, new figures are out for USA oil inventories.

Interestingly, deliveries from Saudi to China are also lower YoY, offsetting an increase to India.

Turkey claims that he was killed there-a claim that Saudi Arabia has denied.

The government has announced plans to build two strategic storage facilities to hold 6.5 million tonnes of oil costing around Rs 11,000 crore through a joint partnership between state-owned firms and private companies. "The majority of oil demand comes from sectors like heavy vehicles and commercial vehicles, and this demand will remain for a long time to come", he said. “That's easing most concerns that Saudi Arabia could use its oil exports as a weapon against potential foreign sanctions, though that risk was limited under any scenario.”.

The breakdown of the talks is equivalent to the Saudis and Kuwaitis agreeing to cut production by 500,000 barrels a day, said Phil Flynn, senior market analyst at Price Futures Group.

New U.S. sanctions on Iranian oil exports start on November 4, while Iran has accused Saudi Arabia and Russian Federation of breaking an OPEC-led agreement on output cuts by producing more crude.

Gasoline stocks dropped by 2m barrels the EIA data also showed.