Oil Tumbles As Russia, Saudi Arabia Plan To Increase Output
Crude oil prices came off four-year highs on Thursday, dragged down by reports suggesting Russia and Saudi Arabia have struck a private deal to raise crude output.
The recent data from the U.S. Energy Information Administration showed domestic crude supplies to have surged by about 8 million barrels to about 404 million barrels in the week ended September 28. That was the largest weekly climb since March 2017.
In the week ended September 21, crude stockpiles had increased by 1.9 million barrels, after five consecutive weeks of declines.
According to EIA, gasoline stockpiles fell by 500,000 barrels last week, while distillate stockpiles declined by 1.8 million barrels. The agency also said that supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, increased by 1.699 barrels last week.
Crude oil futures for November delivery ended down $2.08, or 2.7%, at $74.33 a barrel. That was crude's worst single-session loss in about three weeks.
On Wednesday, crude oil futures ended up $1.18, or 1.6%, at $76.41 a barrel.
According to reports, Russia and Saudi Arabia, after a series of private meetings last month, struck a deal, to raise oil production from September through December to cool rising prices and to help offset loss of Iranian oil to some extent.
After withdrawing from the nuclear deal in May, the United States started reimposing sanctions on the Iranian economy that were lifted under the deal in exchange for curbs on Tehran's nuclear program. The next round of sanctions, targeting Iran's oil exports, will come into effect in early November.