Published: Mon, October 15, 2018
Money | By Armando Alvarado

$85 oil opens chasm between emerging market winners and losers

$85 oil opens chasm between emerging market winners and losers

Stock markets worldwide bounced back on Friday after a multi-day sell-off but remained on track for their biggest weekly losses in months, while US Treasury yields inched higher and the US dollar held its gains.

A monthly report from the Organization of the Petroleum Exporting Countries released Thursday revealed a rise in OPEC and Russian crude-oil production in September, more than making up for a continuing decline in Iranian output ahead of the implementation of US sanctions on Iran's oil industry.

McTeague says there are a number of other factors also driving down prices, including a large refinery shut down in the USA that usually buys a lot of Canadian crude.

Global benchmark Brent crude LCOc1 fell 12 cents a barrel to $80.15 by 11:47 a.m. EDT (1547 GMT), after dropping 3.4 percent on Thursday.

Oil prices were up Friday as there was a reported 11-rig increase for oil and gas in the United States this week.

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Increases in OPEC crude oil production to offset declines in Iran and Venezuela have resulted in declining OPEC spare crude oil production capacity, said the report.

The IEA cut its estimate for global oil-demand growth for both 2018 and 2019 by about 110,000 barrels a day to 1.3 million and 1.4 million barrels a day respectively. “They include rising trade tensions, Fed policy tightening, and emerging-market weakness.”.

Crude inventories rose by 6 million barrels in the week to October 5, compared with analysts' expectations for an increase of 2.6 million barrels. That was much larger than what analysts had expected.

“Indeed, it's hard to sugar coat this week's inventory data, but for perpetual bulls like my self, if risk stabilizes around improving U.S. Furthermore, today's data released by Baker Hughes showed that the number of active oil rigs in the US rose to 869 from 861 recorded in the previous week.

Gasoline stockpiles were up by 1 million barrels last week, while distillate stockpiles declined by 2.7 million barrels, the EIA report revealed. In the U.S. Gulf of Mexico, companies cut output by 40 percent on Thursday because of Hurricane Michael, even as some operators began returning crews to offshore platforms.

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