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Oil little changed despite Saudi pledge to boost output

Oil futures were little changed on Monday after paring earlier losses despite Saudi Arabia’s pledge to raise crude production to a record high, two weeks before U.S. sanctions potentially choke off Iranian supplies.

Saudi Energy Minister Khalid al-Falih told Russia’s TASS news agency that his country had no intention of unleashing a 1973-style oil embargo on Western consumers, but rather was focused on raising output to compensate for supply losses elsewhere, such as Iran.

Falih said Saudi Arabia would soon raise output to 11 million barrels per day (bpd) from the current 10.7 million. He added that Riyadh had capacity to increase production to 12 million bpd.

“Oil prices are finely balanced in today’s trading session despite the Saudi pledge to boost production. It is still not a foregone conclusion that the kingdom’s production increase will be enough to compensate for the potential output loss from Iran and Venezuela,” said Abhishek Kumar, senior energy analyst at Interfax Energy in London.

Brent LCOc1 crude futures for December delivery rose 5 cents to settle at $79.83 a barrel. West Texas Intermediate (WTI) CLc1 for November delivery also rose 5 cents to settle at $69.17 on its last day as the U.S. front-month. In intraday trade, WTI fell as low as $68.27, its lowest since Sept. 14.

An internal document reviewed by Reuters suggested OPEC is struggling to add barrels as an increase in Saudi supply was offset by declines elsewhere, including Iran and Venezuela.

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