(Bloomberg) -- Crude declined to the lowest since Saudi Arabia’s oil industry suffered devastating attacks as investors gauged the kingdom’s efforts to restore production.
Futures in New York settled down 1.4% to the lowest since before the Sept. 14 bombardment of Saudi oil installations. State oil producer Aramco has boosted total capacity to more than 11 million barrels a day, according to people with knowledge of the situation, a week earlier than forecast.
The “Saudis seem to be getting their output back on track,” said Gene McGillian, a senior analyst and broker at Tradition Energy in Connecticut. “What we’ve given back is the geopolitical premium.”
Some of the session’s losses were checked after U.S. President Donald Trump said the trade dispute with China could be resolved “sooner than you think,” allaying fears about faltering energy demand.
Meanwhile, Iran said U.S. sanctions are a roadblock to negotiations between the Islamic Republic and the world’s biggest economic power, dimming prospects for a return of Iranian oil to the market.
For the past week and a half, Saudi efforts to repair damaged oil installations were the overriding factor in crude markets. Some observers have criticized the kingdom’s restoration targets as too ambitious.
Prices also were undermined by a U.S. Energy Information Administration report that said crude supplies rose nationwide last and at the key storage hub in northern Oklahoma.
West Texas Intermediate for November delivery settled 1.4% lower at $56.49 a barrel on the New York Mercantile Exchange. Brent for the same month closed down 1.1% to $62.39 on the ICE Futures Europe Exchange and traded at a $5.90 premium to WTI.
To contact the reporter on this story: Sheela Tobben in New York at firstname.lastname@example.org
To contact the editors responsible for this story: David Marino at email@example.com, Joe Carroll, Christine Buurma
For more articles like this, please visit us at bloomberg.com
©2019 Bloomberg L.P.