Oil prices continue to surge

Oil prices continue to surge

As crude oil prices reach a four-year high, Trump repeatedly has demanded OPEC and Saudi Arabia, the world's biggest oil exporter, push prices down.

November West Texas Intermediate crude CLX8, +0.51% the US benchmark contract, lost $2.08, or 2.7%, to settle at $74.33 a barrel on the New York Mercantile Exchange.

The global oil benchmark, Brent crude, on Wednesday, jumped to $86 per barrel with traders weighing falls in Iranian exports over pending United States' sanctions.

Asked about whether Russian Federation and Saudi Arabia would raise production to ease concerns about supply and cool oil prices, Novak said that Russian Federation has already reversed all 300,000 bpd of the cuts it had pledged in the OPEC+ deal and added another 100,000-bpd production in September.

Brent, the worldwide benchmark, rose more than 1.5% to almost $86 per barrel.

"If Genscape is right and we do have more oil then the drop in inventories we witnessed over the previous year plus is coming to an end", said Gene McGillian, manager of market research at Tradition Energy.

With crude prices soaring and many currencies in emerging markets, including India's rupee and Indonesia's rupiah declining, analysts warn that economic growth may be eroded. Tokyo has been seeking a United States exemption for its Iranian oil imports as it sees the supplies as important for the country's energy security and businesses. The contract was up 2.2 percent this week.

The Trump administration has looked to Middle Eastern producers to pick up the slack left by its policy, with Saudi Arabia agreeing earlier this year to increase its oil output by a "measurable" amount and OPEC agreeing to reduce compliance with coordinated supply constraints. The global benchmark crude traded at a $10.33 premium to WTI for the same month.

Following the spike, which is attributed to US sanctions on Iran's exports and the Organization of Petroleum Exporting Countries' reluctance to raise oil production last week, energy experts have predicted a surge beyond the $90 mark. The startup could lead to an additional 500,000 barrels a day in production.

"Iranian exports could fall below 1 million bpd in November", U.S. bank Jefferies said.

Many analysts said they expected Iranian exports to drop by around 1 million barrels per day.

The Energy Information Administration reported Wednesday that domestic crude supplies surged by 8 million barrels for the week ended September 28.

-With assistance from Stephen Stapczynski.