Saudi Energy Minister: Cant cover Iran's oil production

Saudi Energy Minister: Cant cover Iran's oil production

Saudi Energy Minister: Cant cover Iran's oil production

Iran sanctions are around the corner (in November), but for now the crude oil market seems to be focused on lower global stocks (lower growth?) and the Saudi murder of Jamal Khashoggi.

The kingdom, which produces more than a tenth of global supplies, had vowed on Monday not to withhold its output as a political weapon amid the worldwide backlash over the murder of journalist Jamal Khashoggi.

"Significant investment flows" have returned to the oil and gas industry that will bring on new supplies to help replace losses in areas such as the North Sea and in some OPEC countries, he said.

He added there is NO guarantee that oil prices would not go higher once anti-Iran sanctions come into force next month. And those interests are what many countries are considering as they look at the role the Saudi Arabian government may have played in the killing of one of its most prominent critics, journalist Jamal Khashoggi.

South Africa has, so far, maintained an aloof silence, which is understandable given our country's interest in, and relations with, Saudi Arabia. "But Saudi Arabia is a very responsible country, for decades we used our oil policy as (a) responsible economic tool and isolated it from politics", al-Falih said. Slowly but surely, geopolitical power is starting to ebb away from Saudi Arabia.

Falih said Saudi Arabia would soon raise output to 11 million barrels per day (bpd) from the current 10.7 million. Shipping brokerage Eastport said crude prices were "expected to decline in coming months, as rising production in the US offsets increasing global demand".

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"If 3 million barrels per day disappears, we can not cover this volume".

Falih said oil producers will continue to monitor supply and demand in the market, especially with the Iran sanctions about to kick in, and would be ready to act if needed.

Zanganeh noted that higher oil prices would strongly affect the global economy. "So we have to use oil reserves".

In other news, US drillers added four oil rigs in the week to October 19, bringing the total count to 873, Baker Hughes energy services firm said on Friday, raising the rig count to the highest level since March 2015.

J.P. Morgan said it raised its 2019 Brent price forecast by a whopping $20.50 per barrel to $83.50 saying this "bullish argument is strongly driven by tighter supply due to Iranian sanctions and declining spare capacity".

US crude inventories probably rose 3.7 million barrels last week, according to a Bloomberg survey of analysts.

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