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Crude oil steady as US-Saudi relation assessed

23-Oct-2018

NYMEX crude trades in a narrow range above $69 per barrel as market players assess US-Saudi tensions and its possible impact on crude supply. Market players are also on sidelines ahead of US inventory report.

US-Saudi tensions are high on murder of a Saudi state critic Jamal Khashoggi at Saudi consulate in Istanbul, Turkey.

Saudi officials initially said Mr. Khashoggi had left the consulate on the same day he visited it. Last Friday they admitted for the first time he was dead but said he had been killed in a "fist fight". On Monday, Saudi Arabia acknowledged Mr. Khashoggi had been murdered, but said the Saudi leadership had not been aware of the "rogue operation".

Many world leaders have condemned the murdered and demanded a full investigation. The US however seems unlikely to take harsh steps against Saudi Arabia, an ally. This is evident from the fact that US Treasury Secretary Steven Mnuchin met Mohammed bin Salman on Monday.

Meanwhile, Saudi Arabia Energy Minister Khalid Al-Falih said Saudi Arabia has no intention of using its oil wealth as a political tool in the controversy over the killing of journalist Jamal Khashoggi.

He further said that Saudi Arabia is ready to raise its output to 11 million barrels a day "in the near future" and has the ability to lift production as high as 12 million barrels a day if the market requires it.

US crude oil stocks have risen for last four weeks on higher output and lower refinery demand. EIA weekly report due Wednesday is expected to note a 3.4 million barrels increase in US crude oil stocks.

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