Brent Crude Price Drops To $75 From $86 High

An Iranian warship

Energy Information Administration data showed US crude inventories last week climbed for a sixth straight week.

Traders said oil received some support from stock markets, which pulled back from 20-month lows on Wednesday amid pledges by China to support its markets.

One might expect the market to be nervous ahead of the impending USA sanctions on Iran, but the oil price dipped this week.

USA oil production that was surprisingly flat for the last few weeks nearly magically surged rising by 300,000 barrels a day, from 10.9 million barrels to 11.2 million barrels a day in one week, one of the biggest weekly jumps in recent memory.

October wasn't just a tough month for equities, it was also a crushing month for crude oil.

Another factor that weighed on prices over the last few weeks was the great Mexican Hedge.

OPEC increased output by 430,000 barrels to 33.33 million barrels a day in October, the highest since 2016, according to a Bloomberg survey of officials, analysts and ship-tracking data. Prices capped this week's loss on signs of a possible trade agreement between the USA and China. In 2017, the country consumed more than 19 million barrels of crude oil every day.

NTSB sending team to IN crash site where 3 siblings were killed
Six-year-old twin brothers Xzavier and Mason Ingle and their 9-year-old sister, Alivia Stahl, died at the scene, he said. A 9-year-old girl in IN died Tuesday morning trying to shield her younger brothers from an oncoming vehicle .

Plus, it isn't clear how easily - or quickly Iran's crude-oil output can be replaced.

Oil is also under pressure from rising output by the world's biggest producers, Russia, the U.S. and Saudi Arabia, which are helping to replenish global oil inventories after more than a year of stock draws.

Saudi Arabia and Russian Federation pledged to pump more oil to offset declines in Venezuela and plug any supply shortfalls from USA sanctions on Iran. This means that the country imports more than 10 million barrels every day.

There are also signs of a slowdown in global trade, with container and bulk freight rates dropping after rising for most of 2018, according to reports.

On Thursday, oil prices rose as investors were encouraged by a strong rebound in the USA stock markets. That's a post-Soviet record, and not far off the highest-ever production.

Despite surging output, concerns lingered ahead of the start of United States sanctions against Iran's petroleum exports from next week. This increase was in line with the increase in production from the United States.

China for example, has already said it would continue to buying Iranian oil, despite Washington's threat to block Chinese companies from doing business in the U.S. Then again, China doesn't seem greatly concerned with the threat, given the current trade war.

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