US, Russia, Saudi Arabia crash oil prices
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with saudi arabia pumping 10.65 million bpd in october combined output from the top-three oil producers is at a record 33.41 million bpd meaning that russia the united states and saudi arabia meet more than a third of the worlds almost 100 million bpd of consumption1 oil prices fell on friday as surging output by the worlds three largest producers united states russia and saudi arabia outweighed supply concerns from the start of u.s. sanctions next week against irans petroleum exports1 u.s. west texas intermediate wti crude futures were down 24 cents or 0.4 percent at 63.45 a barrel1 brent has fallen by over 12 percent since the beginning of october while wti has lost more than 13 percent in value1 more troubling is the shift in structure towards contango u.s. investment bank jefferies said on friday1 contango implies oversupply as it means prices for future delivery are higher than for immediate dispatch1 this makes it attractive for traders to store oil for later sale although jefferies said spreads are still insufficient to encourage physical storage1 prices for april 2019 delivery are around 20 cents above january1 downward pressure on oil is also visible in the physical market where saudi arabia is expected to cut december crude prices amid higher supply and a glut in refined products that has eroded refinery profits1 the organization of the petroleum exporting countries opec boosted oil production in october to 33.31 million barrels per day bpd a reuters survey found this week up 390000 bpd from september and the highest by opec since december 20161 in the united states crude production has established itself well over 11 million bpd and the u.s. is now running neck and neck with russia for the title of top producer1 russian production has risen to record high of 11.41 million bpd in october up from 11.36 million bpd in september1 front-month brent crude futures were at 72.60 per barrel at 0441 gmt on friday down 29 cents or 0.4 percent from their last close1 this surge has driven the market into oversupply jefferies said1 despite surging output concerns lingered ahead of the start of u.s. sanctions against irans petroleum exports from next week1 irans biggest oil customers all in asia are seeking sanction waivers1 potential waivers appear targeted at india and south korea and they require some reductions over current import volumes while still allowing oil to flow said clayton allen of height securities1 we think trump will agree to china importing some volumes similar to the treatment that india and south korea receive he said1 japan is seeking a similar deal1 despite these efforts analysts said any potential iranian oil sanction waivers would likely only be temporary1 the u.s. may use waivers to slow-walk implementation but these will not apply indefinitely he added1 goldman sachs said it expects irans crude oil exports to fall to 1.15 million bpd by the end of the year down from around 2.5 million bpd in mid-20181 we still expect that the global oil market will be in deficit in 4q18 the u.s. bank said1 by the end of 2019 however goldman expects brent to fall to 65 a barrel largely due to the unleashing of permian u.s. shale supply growth once new pipelines come online1