Iran Blames US for Turmoil on Oil Market

Iran Blames US for Turmoil on Oil Market

Oil prices fell on Wednesday, with USA futures settling below $70 a barrel for the first time in a month, after US crude stockpiles rose 6.5 million barrels, nearly triple what analysts had forecast, while exports dropped.

But for this spare capacity that Saudi Arabia has used to deliver extra barrels in the market, oil prices would "easily be at the three-digit range", he said.

Meanwhile, the American Petroleum Institute, an industry trade group, will release its weekly estimate of USA crude inventories late Tuesday, while the EIA's more closely followed report will follow Wednesday morning.

What could the current uncertainty surrounding U.S. -Saudi relations mean for oil and gasoline prices?

Benchmark Brent crude oil jumped by $1.49 a barrel to a high of $81.92 before giving up its gains to trade around $80.38, down 5 cents, by 1345 GMT. "Middle Eastern crudes, and we are also taking some USA grades".

Overall, analysts forecast that U.S. crude stockpiles rose last week for the fourth straight week, by about 2.2 million barrels, according to a Reuters poll ahead of weekly inventory reports.

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Diplomatic tensions surrounding the disappearance of journalist Jamal Khashoggi and fears Saudi Arabia could cut off its oil supply in retaliation had helped raise prices earlier this week.

The Iranian official, in turn, said the Islamic Republic expects South Korea as one of its key business partners to continue its operation in Iran in the situation created by the USA sanctions. He said that all these factors along with Iran sanctions is pushing oil prices up. Meanwhile, stockpiles in the nation's storage hub of Cushing, Oklahoma, climbed by 1.5 million barrels, according to the API, which would be the fourth consecutive increase if confirmed by the Energy Information Administration's data Wednesday.

Iran has lost some customers for its oil because of looming US sanctions, but high prices are making up for the lost sales, Iranian Vice President Eshaq Jahangiri has said.

Reuters reported on October 15 that oil tankers continued to carry Iranian oil exports to China, India, Turkey, Italy, and a few other destinations earlier this month, one month ahead of the reimposition of oil sanctions.

However, its gross refining margin for the three months through September, or profit earned on each barrel of crude processed, fell to $9.50 per barrel, a 3-1/2 year low. Analysts in a Bloomberg survey forecast government data to show a 2.5-million-barrel gain.

Oil producers in the Permian Basin have started selling a new stream of light crude, said people familiar with the matter, securing a market for the increasingly less dense oil being pumped from the largest USA shale play.

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