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Crude Oil Rebounds After Declining on Saudi Arabia Supply

October 22, 2018 at 19:54 by Vladimir Vyun

Prices for crude oil dipped during the Monday’s trading session but rebounded later. The decline was a reaction to the statement from Saudi Arabia’s Energy Minister Khalid al-Falih that his country will not implement embargo on Western countries similar to the one that happened in 1973. In fact, Saudi Arabia is planning to increase its oil output.

The rebound of oil prices was probably a result of the statement from Iranian Oil Minister Bijan Zanganeh that exports from Saudi Arabia and Russia will not be able to replace Iranian supply lost due to the US sanctions. The minister said:

As I have repeatedly said there is no replacement for Iranian oil in the market. Saudi Arabia and Russia’s output is near their highest level ever and they have no spare capacity to pump more to replace Iran’s oil.

Yet many market analysts were skeptical about that, especially as the United States were increasing production. Baker Hughes reported that the number of US oil rigs increased by 4 last week — the second weekly increase in a row.

Futures for delivery of WTI crude oil in November edged up a bit by 0.07% to $69.17 per barrel as of 19:39 GMT on NYMEX today. December contract for Brent crude advanced 0.36% to $80.07 per barrel on ICE.

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