Oil turns positive as USA inventories seen lower

Posted August 06, 2018

Crude inventories at Cushing dropped 1.1 million barrels since Friday, July 27, traders said, citing a report issued by energy information provider Genscape.

On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.3% at $69.16 a barrel.

Futures fell for the third day in NY, losing as much as 1.1 per cent to hit their lowest level since June 22, but USA government's data showed a surprise gain in nationwide stockpiles on Wednesday.

"It is nearly certain that China will impose additional duties on oil and refined products imported from the United States if the Trump administration implements additional tariffs on the next tranche of Chinese goods".

Output by top exporter Saudi Arabia has also risen recently, to around 11 million bpd, and USA production C-OUT-T-EIA is around that level as well.

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Oil prices fell about 2 percent on Wednesday as a surprise increase in USA crude stockpiles fed concerns about global oversupply, while investors anxious that trade tensions could hit energy demand. Saudi Arabia produced at record levels and support from Kuwait and the United Arab Emirates made up for losses elsewhere in the market.

Brent crude futures were at $73.15 per barrel, down 30 cents from their last close.

US stockpiles have been in the spotlight because they rose unexpectedly last week, stoking fears that the market is becoming oversupplied.

Total motor gasoline inventories decreased by 2.5 million barrels last week, but still about 1.4 percent above the levels of the same week a year ago.

China has said it plans to impose tariffs on liquefied natural gas, raising concerns that it could also impose tariffs on oil, Kilduff said.

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Meanwhile, trade war concerns have resurfaced again on reports the Trump administration is planning to propose a 25% tariff on goods worth over $200 billion imported from China, instead of the original proposal for a 10% levy.

In the statement on Wednesday, Novak said that higher production was due to the need to maintain the market's stability. "We've seen the Opec July numbers increasing quite drastically month-on-month and along with that, Russian production back at pre-deal levels", ING commodities strategist Warren Patterson said.

When OPEC met in June, the organisation agreed it had been cutting supplies excessively and should restore output to 100 percent of a target set in late 2016.

On Monday, a Reuters survey found that OPEC production reached a 2018 high in July.

The kingdom's higher supply, along with that from Nigeria and Iraq, pushed up OPEC's total output by 300,000 barrels a day last month.

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This is unedited, unformatted feed from the Press Trust of India wire.