Oil slips as International Monetary Fund cuts outlook, Michael hits U.S. Gulf

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US West Texas Intermediate (WTI) crude was down 34c or 0.5% at $74.62 a barrel, after rising almost 1% in the previous session.

"A rebound in equity markets would help Brent to rebound from $80", said Olivier Jakob, analyst at Petromatrix, adding that a dip below $80 on Thursday did not clearly break that level as a source of technical support.

Companies turned off daily production of about 670,800 barrels of oil and 726 million cubic feet of gas by midday on Tuesday, according to the federal offshore regulator, the Bureau of Safety and Environmental Enforcement (BSEE).

Speaking of crude oil, recently Iran reported that Saudi Arabia is not replacing Iran's oil export.

Crude was still heading for its first weekly drop in five weeks, pressured by a big rise in US inventories and fading concerns for now that looming USA sanctions on Iran will cut supplies significantly.

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But the effect on imports will be higher as the country imports more than it exports.

Energy hungry India now imports more than 82 percent of crude oil for its domestic requirement and about 62 percent of its (Indian) oil imports come from Saudi Arabia and other middle eastern countries like Iran, Iraq and Kuwait. Brent crude LCOc1 on Wednesday last week reached $86.74 a barrel, the highest since 2014.

Oil prices dropped 2 percent on Wednesday as U.S. equity markets broadly fell, even though energy traders anxious about shrinking Iranian supply from U.S. sanctions and kept an eye on Hurricane Michael, which closed some U.S. Gulf of Mexico oil output. It may lower fuel demand in the USA southeastern markets by 1 million barrels a day, according to Mizuho Securities.

Oil traders will watch for the weekly US drilling rig count, an indicator of upcoming production, which is due at about 1 p.m. from Baker Hughes. Bijan Zanganeh-Iran's Oil Minister-reported that the oil market will not tolerate Saudi Arabia's claim that it has been compromising for the loss of Iran's oil exports. Moreover, presently, the Indian federal government is struggling with higher oil prices and a weakening Rupee (domestic currency) against the USA currency that also weighs on its oil import bill.

The American Petroleum Institute (API), an industry group, will release its data at 4:30 p.m. (2030 GMT), followed by the EIA's report on Thursday at 11 a.m. - both reports delayed a day by Monday's federal holiday. Demand growth of 1.54 million barrels a day this year will slow to 1.36 million next year.

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