Oil prices reversed early losses Wednesday after the market digested government data that showed a surprise build in USA crude inventories, but also indicated bullish demand for gasoline.
U.S. West Texas Intermediate was up 51 cents, or 0.7 percent, at $69.97, extending a 1 percent gain in the previous session.
Benchmark Brent crude oil fell $1.07 to a low of $71.83 a barrel before recovering a little to trade around $71.90 by 1045 GMT.
Not only is U.S. output at a record level but other major oil producing nations such as Russian Federation and the members of the Organization of the Petroleum Exporting Countries are having trouble reducing their production. He also said concerns that Saudi Arabia and its partners are moving to substantially oversupply the market are "without basis". Slowing trade growth will weigh on physical demand for oil..
As per Goldman Sachs, unpredictable policy from the US government is increasing volatility in the oil and fuel markets.More news: Andrew Lincoln Leaving 'The Walking Dead' in Season 9 - Rick Dies?
The most interesting things to watch was decline in United States net imports of petroleum products to just 1.670 mb/d, the lowest weekly total on record in at least three decades. USA energy companies left oil rig count unchanged this week as the rate of growth has slowed over the past month or so, with a decline in crude prices from late May through late June.
Since January 2017, OPEC and non-OPEC countries did manage to bring back supplies to 5-year averages having cut production by about 1.8 million barrels a day, and in the process helping lift prices to a three-year high of more than $80 a barrel in May.
Meanwhile, OPEC and non-OPEC producers cut oil output in June by 20 percent more than agreed levels, compared with 47 percent in May, two sources familiar with the matter told Reuters on Wednesday.
Strong crack spreads - the margin on turning crude oil into diesel, gasoline and other products - have spurred refiners to keep production high. Thanks to such efforts, the company was able to reduce the share of Iranian crude oil imports to 10 percent as of last month, said a Hyundai Oilbank official.More news: National Hot Dog Day 2018 freebies & deals TODAY
"That's the takeaway from Wood Mackenzie's latest long-term outlook for global oil supply", reports OilPrice.com, an industry site.
Still, overnight oil is weak as the USA dollar soars and other commodities get crushed.
The Energy Information Administration (EIA) reported that USA crude oil production exceeded 11 million barrels a day for the first time in history.
Looking at other news, OPEC and non-OPEC compliance with recent supply restrictions is now running at 120% according to anonymous sources who spoke to Reuters.
Oil prices went up on Wednesday after official data showed that US gasoline inventories declined more than expected.More news: Trump, Putin begin day of meetings in Helsinki