By Alex Longley

(Bloomberg) —

Summary of what’s shaping the oil market on Thursday: All eyes on U.S. inventories data due Thursday after API reported U.S. crude stockpiles rose by significantly more than analysts expect. OPEC, allies are said to consider cutting oil output by more than the 1m b/d Saudi Arabia proposed earlier this week.

* Crude stockpiles swelled by ~8.8m bbl last week, API said, according to people familiar with data

** That compares with median analyst forecast of 3.2m bbl before EIA data due at 11am ET
** If the DOE reports a big number, “then this will be ill-timed for the justifications that the price correction is just due to technical trades,” Petromatrix Managing Director Olivier Jakob wrote in report

* Russian President Vladimir Putin said $70/bbl crude is fine for his country and refused to commit to output cuts, as some OPEC members have urged

** READ: OPEC+ Said to Weigh Bigger Output Cut on Increasing Risk of Glut
** Output cut from OPEC and its allies might not be what the market needs right now anyway, Morgan Stanley suggested

* Little sign of respite from this week’s sell-off in options markets. Brent, WTI’s put skews held near multi-year highs at Wednesday’s close
* Analysts at Goldman Sachs Group Inc. think they’ve uncovered one of the main culprits behind oil’s epic price plunge: a rush by Wall Street banks to cover their exposure to producers’ hedges
* Elsewhere the Khashoggi affair continued to unfold, with Saudi Arabiaonce again denying any knowledge on the part of the Crown Prince Mohammed bin Salman, while signalling harsh punishment for the perpetrators. The dollar rose, while British Prime Minister Theresa May’s Brexit plan threatened to unravel amid high-profile ministerial resignations

To contact the reporter on this story:
Alex Longley in London at alongley@bloomberg.net

To contact the editors responsible for this story:
Alaric Nightingale at anightingal1@bloomberg.net
John Deane