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Oil extends losses after Saudi Arabia to restore output by end-Sept

Wed, 18th Sep 2019 01:29

* Saudi Arabia to restore oil output by end Sept - energyminister

* U.S. believes Saudi attacks came from southwest Iran -official

* U.S. crude oil stocks rise 592,000 bbls - API

By Jessica Jaganathan

SINGAPORE, Sept 18 (Reuters) - Oil prices extended theirlosses from the previous session on Wednesday, after SaudiArabia's energy minister said the Kingdom will restore lost oilproduction by the end of the month.

But investors remained cautious of potential tension in theMiddle East after the United States said it believes the attacksthat crippled Saudi Arabian oil facilities last weekendoriginated in southwestern Iran. Iran has denied involvement inthe strikes.

Brent crude oil futures fell 36 cents, or 0.6%, to$64.19 a barrel by 0005 GMT, after tumbling 6.5% the previoussession.

U.S. West Texas Intermediate (WTI) crude futures fell43 cents, or 0.7%, to $58.91 a barrel, after sinking by 5.7% onTuesday.

"In view of the vulnerability of Saudi's supply chain andthe likelihood that such attacks could be repeated in thefuture, we expect the market to reprice the geopolitical riskpremium in oil," BNP Paribas' Harry Tchilinguirian said in anote.

"The oil market has so far been complacent about recentdevelopments in the Middle East. In our opinion, this will nolonger be the case going forward."

Saudi Arabia sought to reassure markets after the attack onSaturday halved oil output, saying on Tuesday that fullproduction would be restored by month's end.

Energy Minister Prince Abdulaziz bin Salman said on Tuesdaythat average oil production in September and October would be9.89 million barrels per day and that the world's top oilexporter would ensure full oil supply commitments to itscustomers this month.

Saudi Aramco has informed some Asian refiners that it willsupply full allocated volumes of crude oil in October, albeitwith some changes.

Still, risks to oil prices remained after a U.S. officialsaid that Washington believes the attacks originated insouthwestern Iran.

Relations between the United States and Iran havedeteriorated since U.S. President Donald Trump pulled out of theIran nuclear accord last year and reimposed sanctions on its oilexports.

Tehran rejects the charges it was behind the strikes and onTuesday ruled out talks with Trump.

U.S. crude inventories rose by 592,000 barrels in the weekended Sept. 13 to 422.5 million, data from industry group theAmerican Petroleum Institute showed on Tuesday. Analysts hadexpected a decrease of 2.5 million barrels.

Official U.S. government data will be released on Wednesday.(Editing by Jacqueline Wong)

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