U.S. crude oil inventories drop slightly last week: API

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Imports rose as many refiners resumed purchases after maintenance of units.

In another sign of divergence, many equity prices in the sector notched 2018 highs well before October. The country's overall purchases from Iran in the April-October period, the first seven months of the current fiscal year, rose 34 percent.

The S&P 500 hit a three-week low on Tuesday as weak results and forecasts from big retailers fanned worries about holiday season sales, while tech stocks continued to slide on concerns about iPhone sales.

West Texas Intermediate (WTI) for January delivery sank US$3.77 to settle at US$53.43 a barrel on the New York Mercantile Exchange, down 6.6 per cent.

Global stock markets have suffered a shakeout in the past two months, pressured by worries of a peak in corporate earnings growth, rising borrowing costs, slowing global economic momentum and worldwide trade tensions.

"Part of the supply issue has been surging US production", he added.

"I think you're going to see a risk-off type of market", Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors, said in an interview.

"This is a risk aversion trade", said Mark Connors, global head of portfolio and risk advisory at Credit Suisse.

Trump said he won't let the murder of US-based journalist Jamal Khashoggi jeopardize relations with the Saudis as oil prices may "go through the roof" if the relationship between the two nations breaks.

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As of 10:26 a.m. EST Brent crude front-month prices fell 1.2 percent to $65.95 per barrel, while WTI front-month was 1.1 percent lower to $56.06 per barrel, partly recovering from deeper declines earlier in the session.

Fiona Cincotta, senior market analyst at City Index, said yesterday: 'Fears of slowing global growth are fuelling concerns over global demand, just at a time when Saudi Arabia, Russia and the U.S. continue to ramp up production'. "It really is a too-big-to-fail relationship", said Joe McMonigle, senior energy policy analyst at Hedgeye Risk Management in Washington.

Oil halted a slide near $54 a barrel as investors weighed industry data that showed U.S. crude inventories unexpectedly fell last week against doubts over Opec's plans to cut output.

The International Energy Agency (IEA) warned Opec and other producers of the "negative implications" of supply cuts, with many analysts fearing a spike in crude prices could erode consumption.

Official government data is due Wednesday morning.

"While the news that OPEC+ said it would cut 1.4 million barrels of oil per day from production, it's looking likely that the cuts will have to be deeper in order to stabilise the price".

The Organization of the Petroleum Exporting Countries is pushing for a supply cut of 1 million to 1.4 million bpd when it meets on December 6.

"We are entering an unprecedented period of uncertainty in oil markets", IEA Executive Director Fatih Birol told a conference in Norway on Monday.