SINGAPORE (Reuters) – Oil prices fell on Tuesday, impacted by ongoing weakness in global equity markets and signs of rising global supply despite impending sanctions on Iran's crude oil exports.
FILE PHOTO – An employee holds a gas pump to fill a car at a gas station in central Seoul. April 6, 2011. REUTERS / Lee Jae-Won
The first half of the month crude oil futures, LCOc1, was $ 76.78 a barrel at 0040 GMT, up 56 cents, or 0.8 percent, from the last close.
West Texas Intermediate (WTI) crude oil CLc1 traded at $ 66.78 a barrel, down 26 cents, or 0.4 percent, from last year's comparison.
Oil prices were hit by the slump in financial markets this month. On Monday, equities plummeted after the US plans another $ 257 billion on Chinese goods if talks between Presidents Donald Trump and Xi Jinping do not end trade between the world's two largest economies.
Oil was also burdened by signs of rising supply from top producers.
"A Saudi pledge to produce as much oil as possible and the stock market boom have drastically reduced concerns over the implementation of US sanctions on Iran on November 4," said Ole Hansen, head of commodity strategy at Saxo Bank.
Russia has also signaled that it will supply enough oil to meet demand as soon as the US sanctions Iran next week.
In a sign that oil supply is high despite the looming US sanctions on Iran's oil exports, crude oil production of the world's top three producers Russia, USA and Saudi Arabia reached 33 million barrels a day for the first time (bpd) September showed refining Eikon Dates. C-RU-OUT C-OUT-T-EIA PRODN-SA
CHART: Russian, US and Saudi Crude Oil Production – tmsnrt.rs/2CRXg31
That's an increase of 10 million barrels per day since the beginning of the decade, meaning that these three producers now cover a third of global crude oil demand alone.
Nevertheless, Hansen said, "Given the as yet unknown impact on Iran's ability to produce and export under sanctions … we may see some speculative buying before November 4th."
Iranian crude oil exports, on the other hand, have dropped from a peak in 2018 from just over 2.5 million barrels in May to around 1.5 million barrels a day in September and October, according to Eikon data.
GRAPHIC: Iran Seaborne Crude Exports – tmsnrt.rs/2RfVf4p
Reporting by Henning Gloystein; Arrangement of Joseph Radford