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US crude falls into bear market on growing global oil output

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U.S. oil prices dropped for a ninth consecutive session on Thursday, falling into a bear market, on further signs of growing supply even as data showed record Chinese oil imports.

Crude prices have plunged over the last five weeks, buffeted by October’s broader market slump, signs of deteriorating demand and rising output from key producers.

The decline continued earlier this week after the Trump administration announced it would issue waivers to eight countries, allowing them to continue importing Iranian crude for the next 180 days. The United States restored sanctions on Iran’s energy, banking and shipping industries on Monday.

“As a result, oil supplies are going to be higher than the market anticipated,” said Andrew Lipow, president of Lipow Oil Associates. “So it seems to me that the loss of Iranian supplies is only going to be between 1 and 1.2 million barrels per day, and the OPEC and non-OPEC producers have more than made up for that.”

U.S. West Texas Intermediate crude fell as low as $60.40 a barrel on Thursday, briefly wiping out its gains for the year. The contract settled $1, or 1.6 percent, lower at $60.67. That’s down 21 percent from last month’s four-year high of $76.90, putting WTI in bear market territory.

Brent crude fell $1.33, or 1.9 percent, to $70.74 a barrel at 2:30 p.m. ET. The international benchmark hit a session low of $70.60, tumbling 18.6 percent from its nearly four-year high of $86.74 on Oct. 3.

U.S. gasoline futures are also trading in bear market territory, down nearly 28 percent from their 52-week high.

Prices fell to a nearly eight-month low on Wednesday after the U.S. Energy Information Administration reported the seventh consecutive weekly increase in U.S. crude stockpiles.

U.S. output also hit an all-time high at 11.6 million barrels per day last week, according to preliminary figures released by the EIA. If confirmed during revisions, it would more firmly establish the United States as the world’s top oil producer.

The EIA forecast this week that U.S. oil production will average 12.1 million bpd in 2019, marking an upward revision from its last projection.

The other producers in the top three, Saudi Arabia and Russia, have been dialing up production since June.

“All three of them are continuing to pump at record levels, that’s been … part of what’s causing oil to move into a bear market,” Tamar Essner, director of energy and utilities at Nasdaq Corporate Solutions, told CNBC’s “Worldwide Exchange” on Thursday.

“I think the market is grappling with some fundamental uncertainties,” she said. “We don’t know if we are oversupplied or undersupplied.”

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Trump, Macron agree on European defense after Trump’s ‘very insulting’ comment

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U.S. President Donald Trump and France’s Emmanuel Macron agreed on Saturday on the need for more European defense spending, papering over an earlier Trump tweet that had described Macron’s call for a European army as “very insulting.”

Meeting for talks at the Elysee a day before commemorations to mark the 100th anniversary of the end of World War One, Macron welcomed Trump under rainy Parisian skies with a firm handshake. But there appeared to be less immediate warmth in the greeting between the two than in the past.

Seated on gilded chairs in the ornate presidential palace, Macron placed his hand on Trump’s knee and referred to him as “my friend,” while Trump kept more distance, although he also talked up common ground on an issue that had caused friction.

“We want a strong Europe, it’s very important to us, and whichever way we can do it the best and more efficient would be something we both want,” said Trump.

“We want to help Europe but it has to be fair. Right now the burden sharing has been largely on the United States.”

Macron echoed those sentiments, saying he wanted Europe to bear a greater share of the defense costs within NATO, a point he has made repeatedly since taking office, alongside his ambitions for Europe to have its own military capability.

“That’s why I do believe my proposals for European defense are totally consistent with that,” Macron said in English.

Fresh off U.S. congressional elections that saw his Republican Party’s power eroded, Trump’s visit is aimed at bolstering the U.S.-European alliance at a symbolic time, with the world marking the centenary of World War One’s armistice.

But in a tweet prior to landing in Paris, Trump took a dim view of comments Macron made in a Europe 1 radio interview this week in which he appeared to cast the United States as a threat.

Discussing the growing dangers from cyber-hacking, meddling in electoral processes and the U.S. decision to withdraw from a missile treaty, Macron said Europe needed to protect itself against China, Russia “and even the United States.”

Later in the interview he spoke about the need for a European army, saying:

“Faced by Russia, which is on our borders and which has shown that it can be threatening… we need to have a Europe that can better defend itself by itself, without depending solely on the United States.”

Trump, who has pushed NATO allies to pay more for common defense and not rely on the United States, complained.

“Very insulting, but perhaps Europe should first pay its fair share of NATO, which the U.S. subsidizes greatly,” Trump said on Twitter.

The Elysee said the misunderstanding, which it said had been caused by “exaggerated” U.S. press reports, was cleared up during more than an hour of talks it described as “substantial” and “very constructive.”

“We had a great discussion and we are aligned,” the Elysee quoted Trump as saying during the meeting, which covered trade, defense, Syria and the fallout from the murder in Istanbul last month of Saudi journalist Jamal Khashoggi.

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Turkey’s Erdogan says Khashoggi tapes have been given to key foreign nations

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Turkey has given recordings related to the killing of Saudi journalist Jamal Khashoggi to Saudi Arabia, the United States, Germany, France, and Britain, President Tayyip Erdogan said on Saturday.

Turkish sources have said previously that authorities have an audio recording purportedly documenting the murder.

“We gave the tapes. We gave them to Saudi Arabia, to the United States, Germans, French and British, all of them. They have listened to all the conversations in them. They know,” Erdogan said.

Khashoggi, a Washington Post columnist critical of the Saudi government and its de facto ruler Crown Prince Mohammed bin Salman, disappeared at the Saudi consulate in Istanbul on Oct. 2.

Saudi officials said initially that Khashoggi had left the consulate, later saying he died in an unplanned “rogue operation”. The kingdom’s public prosecutor, Saud al-Mojeb, has since said he was killed in a premeditated attack.

Speaking ahead of his departure for France to attend commemorations to mark the 100th anniversary of the end of World War One, Erdogan called on Saudi Arabia to identify the killer from among a 15-man team that arrived in Turkey some days before Khashoggi’s killing.

“There’s no need to distort this issue, they know for certain that the killer, or the killers, is among these 15 people. Saudi Arabia’s government can disclose this by making these 15 people talk,” Erdogan said.

Erdogan also accused Mojeb — who visited Istanbul to discuss the investigation with his Turkish counterpart and make inspections in the Istanbul consulate– of refusing to cooperate, in turn delaying the inquiry.

Following a meeting on Saturday in Paris, U.S. President Donald Trump and French leader Emmanuel Macron agreed that the Saudi authorities needed to shed full light on Khashoggi’s murder, a French presidency source said.

They also agreed that the matter should not be allowed to cause further destabilization in the Middle East and that it could create an opportunity to find a political resolution to the war in Yemen, according to the official.

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US presses China to halt militarization of South China Sea

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In a statement on Saturday, China’s Foreign Ministry described the talks as “frank, constructive and very fruitful.”

Responding sharply to Pompeo’s mention of Taiwan, which China considers a wayward province but which is armed by Washington, Wei said Beijing would defend its claim on the island “at any cost.”

But Wei and Mattis agreed on the need to lower U.S.-China military tensions to avoid unintended clashes, with the Chinese general saying confrontation “will spell disaster to all.” Washington has protested to Beijing about recent behavior by its warships that the U.S. Navy considered unsafe.

While Pompeo spoke little about trade in his public comments, Yang said he hoped the two sides would find a mutually acceptable solution on the issue “before long.”

China and the United States have slapped tariffs on hundreds of billions of dollars of each other’s goods, jolting global financial markets, and Trump has threatened to set tariffs on the remainder of China’s $500 billion-plus exports to the United States if the trade dispute cannot be resolved.

Trump’s administration has also accused China of meddling in U.S. politics ahead of this week’s congressional elections, charges China strongly denies.

Reflecting growing U.S. concerns about the Chinese cyber threat, a senior U.S. intelligence official on Thursday accused China of violating a 2015 agreement aimed at stopping cyber espionage through the hacking of government and corporate data.

Pompeo also reiterated U.S. criticism of China’s “repression of religious groups,” citing treatment of Buddhists in Tibet and minority Uighur Muslims in the Xinjiang region that has drawn condemnation from human rights groups.

Yang defended China’s policies in Xinjiang as measures against “ethnic separatist activities and violent terrorist crimes” but said it was a Chinese internal affair and foreign governments should not interfere.

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