Oil: Saudi energy minister says OPEC in produce as much as you can mode

Saudi
Arabia’s Oil Minister Khalid al-Falih (R) sits next to Russian
Energy Minister Alexander Novak as he addresses a news conference
after an OPEC meeting in Vienna, Austria.
Reuters/Heinz-Peter Bader

• Saudi Arabia’s energy minister said Tuesday that OPEC is in
  “produce as much as you can mode.”
• Both
  West Texas Intermediate and Brent crude prices were down
  almost 5%. 
• Watch
  WTI and Brent
  trade in real time here.

Crude oil was under pressure Tuesday after Saudi Arabia’s
energy minister said OPEC is pumping out as much as
possible. 

Speaking at a global investment conference in Riyadh, Saudi
Arabia, on Tuesday, Saudi energy minister Khalid Al-Falih said
OPEC and its allies are in “produce as much as you can mode,”
according to Bloomberg. 

His comments immediately put pressure on oil prices, which were
already down about 2%. Brent
crude oil, the international benchmark, extended its decline to
4.5%, or $76.30 a barrel, around midday. Meanwhile,
West Texas Intermediate, the US benchmark, was down 4.7% to
just above $66 — its lowest level in two months. 

The oil market had already been under pressure in October, along
with the stocks, as trade tensions and concerns over rising
interest rates weighed.

Last week,
WTI fell below the $70 mark for the first time in a
month, after the Energy Information Agency reported a
larger than expected rise in US inventories. The buildup — at 6.5
million barrels — was twice what analysts were looking for and
was the largest in four months. 

And on Monday, the Russian news agency TASS reported that Saudi
Arabia said it
wouldn’t respond to sanctions with a 1973-style oil embargo
on Western consumers. There were some
concerns the kingdom could use oil as a “weapon” if sanctions
were imposed on it by the US and its allies as a result of the
killing of the journalist Jamal Khashoggi. 

WTI was up 9.75% this year and Brent was higher by 14.24%,
including Tuesday’s losses.

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