Oil prices dip amid expectations of higher USA inventories

India has optional volumes of crude oil from Saudi others to make up for shortfall from Iran Officials

India has optional volumes of crude oil from Saudi others to make up for shortfall from Iran Officials

A day after Saudi Arabia said it would retaliate to any possible USA sanctions over the disappearance of a journalist, which led to a spurt in Brent crude prices, the world's largest oil exporter struck a conciliatory tone in India.

US West Texas Intermediate crude was up 15 cents, or 0.2 per cent, at $72.07 a barrel by 0255 GMT on Wednesday, having settled up 14 cents.

The rise, reported by the US Energy Information Administration was nearly triple what analysts had forecast and further eased prices, which had hit four-year highs of $86.74 earlier this month. Senior officials on Monday had said that Indian oil companies have optional volumes built in their annual crude oil purchase contracts with suppliers like Saudi Arabia and Iraq that will be more than enough to make up for any shortfall in supplies from sanctions-hit Iran.

Prices extended gains in post-settlement trade after data from the American Petroleum Institute (API) showed a surprise decline in US crude inventories. China's slumping purchases of American crude - and its extra buying from elsewhere - have coincided with a trade war between the USA and the Asian country.

Diplomatic tensions surrounding the disappearance of journalist Jamal Khashoggi and fears Saudi Arabia could cut off its oil supply in retaliation had helped raise prices earlier this week. In the next three weeks leading up to the sanctions on Iran, participants will focus on estimates of Iranian production losses, on how much of those losses Saudi Arabia and Russian Federation can (and want to) offset, and how the fresh U.S. -Saudi spat over the disappearance of a Saudi journalist will unfold.

The Russian government is no longer capping oil output increases by local producers, one of the country's top energy companies, Gazprom Neft, said on Tuesday, signalling that Moscow's supply-restraint pact with OPEC has effectively expired for now.

South Korea Defers to Trump on Keeping North Korea Sanctions
Cheong Wa Dae said it took Trump's words as the USA seeking to maintain close coordination on every matter. Still, the lifting of the 2010 sanctions could offer at least some tangible benefits to the North.

Meanwhile, new figures are out for US oil inventories.

Saudi Arabia said in a statement on Sunday, that it plays a "vital role in the global economy".

Brent crude oil slid to $79.75 as the price drop kickstarted by last week's global equity sell off spilled over for another day.

USA gasoline stockpiles fell by 2 million barrels last week, while distillate stockpiles declined by 800,000 barrels, according to the EIA.

The minister said India's accelerated economic growth is playing a major role in rebalancing the distribution of global economic growth. "Saudi Aramco's desire is also to invest in consumer-facing segments such as retail fuels and petrochemicals, building an integrated downstream business spanning India as well as our commitment to invest in crude oil storage here in India in order to be more responsive and closer to the demand needs".

"There are signs the oil market is overheating", Deputy chief executive Vadim Yakovlev said.

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