Oil prices fell more than 2 percent yesterday after Saudi Arabia said it could supply more crude quickly if needed, reassuring investors ahead of United States sanctions on Iran's crude exports that start next month.
Saudi Arabia will allow foreigners to invest in audiovisual services, land transport and real-estate brokerages, the Cabinet decided on Tuesday. USA light crude CLc1 lost $1,77 a barrel to a low of $67,59 before recovering to $67,86, down $1,50.
A sell-off in equities due to concern about the economic outlook also weighed on crude on Tuesday. The countries have successfully clinched a deal to curb oil output within the OPEC+ group, and Russian Federation is ready to sell its S-400 missile defense system to Saudi Arabia. Brent crude futures have now followed WTI following yesterday's plunge which sees the Brent curve now in contango of -$0.03. "We work to stabilise global markets and to facilitate global economic growth", he added.
Falih said the oil producers will continue to monitor supply and demand in the market especially with the Iran sanctions looming and would be ready to act if needed.
Several US lawmakers have suggested imposing sanctions on Saudi Arabia over the killing of Saudi journalist Jamal Khashoggi, while the kingdom, the world's largest oil exporter, pledged to retaliate to any sanctions with "bigger measures". Falih said on Monday there was no intention of doing that.
In an effort to maintain stable supplies to the crude market, Al-Falih said he hopes the Organization of Petroleum Exporting Countries and its non-OPEC oil partners will sign an "open-ended" agreement in December.More news: Amy Schumer & Chris Fischer Expecting First Child! See Her Unique Announcement
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"I cannot give you a guarantee, because I cannot predict what will happen to other suppliers", the minister said, when asked if the world can avoid oil prices hitting $100 per barrel again.
The Saudi minister expected demand for oil, which now stands at around 100 million bpd, to rise to 120 million bpd over the next three decades.
"The weekly inventory data is unlikely to provide any respite, with a fifth consecutive build expected to U.S. oil inventories", said Matt Smith, director of commodity research at ClipperData.
US crude inventories have risen by more than 22 million barrels over the last four weeks, the biggest increase since 2015, when the oil market was heavily oversupplied.
"If oil prices were to rise too much, that would slow the global economy and set off a global recession".