Factors beyond producers' control are impacting oil market - OPEC

Oil price extend losses as other markets fall, stockpiles climb

Oil extends losses as markets fall, inventories climb

Brent crude fell 56 cents a barrel to $79.70 by 12:16 p.m. EDT (1616 GMT), after dropping 3.4 percent on Thursday.

Stocks on major world markets slid to a three-month low on Wednesday, with the benchmark S&P500 stock index falling more than 3 percent, its biggest one-day decline since February.

In its Monthly Oil Market Report for October, released Thursday morning, the Organization of the Petroleum Exporting Countries (OPEC) noted that the cartel's average price for its reference basket soared by $4.92 (up 7%) to $77.18 a barrel in the month of September.

The other big factor in Vitol chairman's bearish forecast is that "no doubt about it-we're going to see demand destruction, sadly".

Risks to the global financial system have risen over the past six months and could increase sharply if pressures in emerging markets escalate or global trade relations deteriorate further, the International Monetary Fund (IMF) said.

Still, oil traders generally agreed that the Iran sanctions are hitting harder than expected, with Jeremy Weir, chief executive officer of Trafigura Group Pte. forecasting 2 million barrels per day (bpd) lost to the market and Vitol and Gunvor Group pegging the volume closer to 1 million bpd.

Hurricane Michael crashed ashore Florida on Wednesday as the third most powerful hurricane ever to strike the US mainland.

Oil and gas field operators in the Gulf of Mexico began to evacuate platform staff and shut in production ahead of Hurricane Michael, which is expected to make landfall in Florida tomorrow.

U.S. Gulf of Mexico producers have cut oil output by 32 percent and natural gas production by 13 percent as a result of the lingering effects of Hurricane Michael, the Bureau of Safety and Environmental Enforcement (BSEE) said on Friday, citing reports from 27 companies.

Worries about crude supply from the Middle East have given prices some support.

India's September oil imports were also boosted by the import of 2 million barrels of Iranian oil by Reliance Industries Ltd. Reliance did not respond to a Reuters email seeking comments. However, the OPEC (and its non-OPEC associates such as Russia) and oil markets are working in the shadow of Trump's tweet and his forthcoming sanctions on Iran's oil industry.

He also noted that triple digit prices "would require a sustainable outage in Iranian exports going down to zero plus another disruption someplace like Venezuela; the way we're seeing it is long dated oil prices are rising, the front-end is weakening which is telling you that hey, we don't have a problem today, we potentially have a problem tomorrow".

USA oil output is expected to rise 1.39 million bpd to a record 10.74 million bpd, the EIA said in its monthly forecast on Wednesday. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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