Crude oil prices fell 5 percent overnight, the biggest drop since March this year, amid a standoff between Qatar and other Gulf nations led by Saudi Arabia.
Data from the U.S. showed a 3.3 million barrel stock buildup last week. Speculation in U.S. inventory has resurfaced, offsetting the production cuts by the Organization of Petroleum Exporting Countries (OPEC).
Andrew Freris, chief executive officer of Ecognosis Advisory Ltd., expects a further decline in prices. Qatar is not a major exporter of oil but the single biggest exporter of liquefied natural gas which is in direct competition with oil, he said.
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