Oil prices sink after International Energy Agency's outlook

Oil prices sink after International Energy Agency's outlook

US President Donald Trump's threats to impose new sanctions on Iran, another key oil producer and OPEC member, may also impact the crude market.

China's overseas crude purchases averaged about 9.04 million barrels a day in September, up 13 percent from the previous month, according to Bloomberg calculations using General Administration of Customs data released Friday. The news alleviated investor concern that demand in the world's largest crude importer might be waning amid faltering economic growth.

Unrest in Iraq, and possible USA action on the Iran nuclear deal, also underpinned prices. Gasoline stockpiles, on the other hand, unexpectedly increased by 2.5 million barrels.

Chinese import data "was well in excess of expectations and you've got an armed stand-off in Kurdistan", Eric Nuttall, a portfolio manager with Ninepoint Partners LP in Toronto, said by telephone.

That's a view shared by a variety of market participants and analysts alike. That production capacity cut had played a role in oil's latest price rise and now that it's gone, upward price movements could become more tentative.

The spike in prices Friday followed two closely watched, somewhat conflicting oil market reports this week, from the Organization of the Petroleum Exporting Countries and the International Energy Agency.

BMW, Great Wall in Talks to Roll Mini Into China
It appears that MINI production is about to venture into China for the first time, if a report by Bloomberg is to be believed. Great Wall shares jumped 13% this week on rumors of the tie-up, and were suspended on Thursday pending an announcement.

Global oil supply rose by 90,000 bpd in September to 97.5m bpd due to higher production from non-Opec countries.

Prices rose 2 percent the day before to back above $50 a barrel.

OPEC with other key oil-producing nations pledged to reduce production by 1.8 million barrels from the beginning of this year. The agreement's impact wasn't immediate, but global oil prices have risen steadily over the past few months, supported by strong demand.

OPEC is expected to extend the oil-curb deal which is scheduled to end on 31 March next year.

USA oil inventories slid for a third straight week and the chief of the International Energy Agency predicted worldwide supply will soon be in sync with demand, provided OPEC maintains ongoing output cuts. Analysts had forecast a draw of 400,000 barrels.

Stephanie Yang contributed to this article.

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