Oil regains some ground

Prices recover slightly after falling steeply in the previous session

Regaining some ground: prices inched higher after sharp losses in the previous session
Regaining some ground: prices inched higher after sharp losses in the previous session

Oil prices on Wednesday clawed back a fraction of their hefty losses the day before that came after Saudi Arabia said it would make up for supply disruptions from US sanctions starting next month on Iran's petroleum exports.

Front-month Brent crude oil futures were at $76.72 a barrel early on Wednesday, 28 cents, or 0.4%, above their last close.

US West Texas Intermediate crude futures were at $66.66 a barrel, up 23 cents, or 0.4%, from their last settlement.

That came after Brent closed down 4.3% and WTI 4% in the previous session.

Saudi Energy Minister Khalid al-Falih said at an investment conference in Riyadh on Tuesday that despite expected supply disruptions from US sanctions against Iran that kick in from 4 November, Saudi Arabia would step up to "meet any demand that materialises to ensure customers are satisfied".

"Oil prices fell substantially ... as Saudi Arabia released assurances it could supply more to the global market," Australia's Rivkin Securities said.

Despite the slump, analysts said markets remained tight because of the looming sanctions.

"We still see Brent reaching $85 per barrel by year-end," said US bank Morgan Stanley.

Into 2019, however, the broader economic outlook could be darkening.

China's state planner said on Wednesday it would step up financial support for regions most hit by the ongoing trade war between Washington and Beijing in which both sides have slapped import tariffs on hundreds of goods.

Meanwhile, South Korea's KOSPI-100 equity index has now fallen by nearly 19% over the past year, the fastest rate of decline since the financial crisis of 2008/09.

The KOSPI-100 has typically correlated closely with growth in international trade, given the South Korean economy's strong orientation towards exports.

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Published 24 October 2018, 04:06Updated 24 October 2018, 04:06
North AmericaMiddle EastIranUSASaudi Arabia