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Oil prices slide on supply surge, global market turmoil scares off investors

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Oil prices fell on Thursday amid volatile currency and stock markets, and as analysts warned of an economic slowdown for 2019 just as crude supply is rising globally.

U.S. West Texas Intermediate (WTI) crude oil futures dropped by around 2 percent from their last settlement, or 93 cents, to $45.61 by 0404 GMT.

International Brent crude futures were down 1.1 percent, or 60 cents, at $54.31 a barrel.

In physical oil markets, top exporter Saudi Arabia is expected to cut February prices for heavier crude grades sold to Asia by up to 50 cents a barrel due to weaker fuel oil margins, respondents to a Reuters survey said on Thursday.

Markets were roiled by a more than 3 percent slump of the U.S. dollar against the Japanese yen overnight, and after tech giant Apple cut its sales forecast.

“We did not foresee the magnitude of the economic deceleration, particularly in Greater China,” Apple chief executive Tim Cook said.

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The slowdown in China and turmoil in stock and currency markets is making investors nervous, including in oil markets.

Investment bank Jefferies said in a 2019 opening note to clients and employees that the start of the year “doesn’t feel as firm, the future doesn’t feel as certain and optimistic, and the path forward does not seem as clear.”

The U.S. bank added that “markets are extremely volatile and virtually impossible to anticipate or navigate.”

Shipping brokerage Eastport said the turmoil in markets is scaring off investors.

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“Falling share prices tend to damage consumer sentiment, which often results in increased caution and reduced spending…Business managers also tend to limit capex, thus weighing on investment as well.”

SUPPLY SURGE

Oil markets have also come under pressure from a surge in supply.

U.S. crude production stood at a record 11.7 million barrels per day (bpd) in late 2018, making the United States the world’s biggest oil producer.

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Others are not sitting idle, with Russian output reaching a record of more than 11 million bpd in 2018.

Supply from Iraq, the number two producer in the Organization of the Petroleum Exporting Countries (OPEC) behind Saudi Arabia, is also up, with December exports at 3.73 million bpd, up from 3.37 million bpd in November.

With production rising and demand growth expected to slow, many analysts expect a global oil supply overhang to build in the first months of 2019.

Reporting by Henning Gloystein; editing by Richard Pullin

Report typos and corrections to [email protected].
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Sailing among the stars: Here’s how photons could revolutionize space flight

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A few days from now, a SpaceX Falcon Heavy rocket will lift off from Florida, carrying a satellite the size of a loaf of bread with nothing to power it but a huge polyester "solar sail."

It's been the stuff of scientists' dreams for decades but has only very recently become a reality.

The idea might sounds crazy: propelling a craft through the vacuum of space with no engine, no fuel, and no solar panels, but instead harnessing the momentum of packets of light energy known as photons -- in this case from our Sun.

The spacecraft to be launched on Monday, called LightSail 2, was developed by the Planetary Society, a US organization that promotes space exploration which was co-founded by the legendary astronomer Carl Sagan in 1980.

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Russians to prod Putin on poverty and his personal life as his ratings tank

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Russians are set to ask President Vladimir Putin about growing poverty at home and tensions abroad during an annual televised phone-in Thursday, which comes following a fall in his approval ratings.

The leader is also likely to face a degree of grilling on his personal life, according to questions submitted by the public online ahead of the live show.

Set to be held for the 17th time since Putin came to power in 1999, the show starts at 0900 GMT and usually lasts several hours.

Ahead of the carefully choreographed show, more than one million questions had been submitted, organisers told Russian news agencies.

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Trump could turn on Hope Hicks just like Michael Cohen: Trump family biographer warns

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Trump family biographer Emily Jane Fox explained that she didn't think that the president would turn on long-time aide Hope Hicks, but then again, it was the same thought about Michael Cohen as well.

In a panel discussion about Hicks' testimony during MSNBC's Brian Williams' Wednesday show, Fox recalled that Micahel Cohen once said that he would take a bullet for the president. Once it appeared that Trump would throw him under the bus, Cohen began looking for a way out.

The same scenario seems to be happening with Hicks now.

"She works at new Fox, which is a company run by a Murdoch son," Fox said. "It's a company that's brand new. She's the head of communications there. And there are shareholders who would take issue with the fact that a senior member of this company is being put in this situation and being thrust on the world stage."

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