Oil declines on prospects of new US record output

Oil prices gave up ground on Tuesday on track for the first loss in three days as recovery efforts from multi-week lows halted on concerns of accelerated US production to fresh record highs, after the US oil rig count hit two-month highs, while losses were contained by a drop in Iranian exports in October and geopolitical tensions from Saudi journalist Jamal Khashoggi's disappearance in Turkey. 

As of 09:10 GMT, US crude fell to $71.20 a barrel, while Brent declined to $80.30 a barrel. 

US crude rose 0.3% yesterday, the second profit in a row away from three-week lows at $70.49, with Brent climbing a similar percentage. 

Oil lost 3.5% last week, the first weekly loss in the last five weeks on concerns over increasing US supplies and doubts over global demand. 

US Oil Rig Count 

Baker Hughes, a US services company, reported an increase of 8 in the oil rig count to 869 rigs, the first such increase in four weeks.

US output is up over 33% since mid-2016 to 11.2 million bpd, a record high and almost overtaking Russia's levels. 

Khashoggi's Disappearance 

Traders are also closely following the developing issue of the disappearance of Saudi journalist Jamal Khashoggi after entering the Saudi Consulate in Turkey, with Saudi Arabia allowing Turkish security forces to enter the consulate and gather evidence. 

US President Donald Trump sent his Secretary of State Micheal Pompeo to Riyadh to gather information on the Washington Post journalist. 

Iran Continues to Bleed 

Initial data showed Iranian exports amounted to just 1.33 million bpd in October to some countries, including Turkey, China, and India, with supplies down from 1.6 million in September.