Oil falls as Saudi Arabia reassures market on supply

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And on Monday, the Russian news agency TASS reported that Saudi Arabia said it wouldn't respond to sanctions with a 1973-style oil embargo on Western consumers. "Two of our oil companies have made nominations to purchase Iranian oil in November".

Falih said he would not rule out the possibility that Saudi Arabia would produce between 1 and 2 million barrels per day (bpd) more than current levels in future. One of its flagship products is called "Yi Lu Tong", meaning "Iran Connect", the bank said in its annual report.

"Iranian oil exports can not be stopped", Zanganeh said, according to the pro-government Tasneem news agency. The US has not imported crude oil and condensate from Iran in several decades. The Energy Select Sector SPDR exchange-traded fund (XLE) fell more than 3%, while the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) declined almost 4%.

Saudi Arabia's energy minister has used public comments over the past week to tone down the kingdom's veiled threat to use oil as a political weapon to retaliate against possible sanctions related to the Khashoggi killing.

Iran's crude oil exports have declined since the United States' announcement of reinstating sanctions against Iran in May, the U.S. Energy Information Administration (EIA) said Tuesday.

Abhishek Kumar, senior energy analyst at Interfax Energy, echoed the sentiments of many in the analytical community by stating, "It is still not a foregone conclusion that the kingdom's production increase will be enough to compensate for the potential output loss from Iran and Venezuela".

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Oil in NY slid more than 5% in Tuesday's session as Saudi Arabia pledged to meet any supply shortfalls and as a risk-off sentiment spread throughout global markets.

The minister reiterated that the market is unable to find a replacement for Iran's oil, urging Trump to abandon his plan to impose sanctions on the country.

Front-month Brent crude oil futures were at $76.72 a barrel early on Wednesday, 28 cents, or 0.4%, above their last close. "That policy has been consistent for many years", Falih said.

According to S&P Global Platts, cumulative production by OPEC in September has been the highest since July 2017. Add to that higher Russian production, a return of Libyan output, and the market is finding healthy supply just at a time when demand is waning. But he added that with Iranian sanctions coming into full force next month, there were no guarantee oil prices would not go higher. Distillates, which include diesel, were down 2.3 million barrels, both more than forecast.

Crude inventories rose by 6.3 million barrels in the week to October 19, compared with analyst expectations for an increase of 3.7 million barrels.