Oil steadies to trade higher after losses

05 August, 2018, 22:55 | Author: Brooke Harris
  • Oil edges lower as supply concerns return

U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 27 cents at $68.69 a barrel by 10:45 a.m. EDT (1445 GMT). The market expected 1.3 million barrels of gasoline draw.

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.

US crude oil exports averaged 1.31 million barrels per day last week, down by 1.37 million barrels per day from the previous week.

While U.S. sanctions on Tehran could quickly tighten the physical market later this year, supplies are now plentiful as the Saudis and Russians boost production before the market loses significant Iranian supply.

After the market closed Tuesday, the American Petroleum Institute reported domestic crude oil inventories swelled by 5.6 million barrels last week, compared to a draw forecast by S&P Global Platts.

The decision has helped to put a lid on a price rally, with crude futures falling more than 7 percent since climbing above $80 a barrel in May.

Crude oil prices turned sharply lower ahead of the start of trading on Wednesday in NY after a surprise build in crude oil inventories in the United States.

Healthcare added 34% fewer jobs in July
Another positive sign was the U-6, or underemployment rate, which fell to 7.5 percent, the lowest since 2001, from 7.8 percent. The U.S. unemployment rate dropped slightly in July, while job gains were lower than many analysts predicted.

Stocks at the key Cushing storage hub in Oklahoma fell by 1.3 million barrels, the lowest level since October 2014, according to data from the Energy Information Administration (EIA). "Brent oil may fall to $67 per barrel", said Reuters technical commodities analyst Wang Tao.

It produced about 11.21 million barrels per day, an increase of 140,000 from a month earlier, according to Bloomberg calculations based on the ministry's data.

Oil prices strengthened Thursday, with USA crude gaining almost 2 percent after traders saw an industry report suggesting domestic crude stockpiles would soon decline again after a surprise rise in the latest week.

The Reuters survey released earlier this week suggests that OPEC (Organization of the Petroleum Exporting Countries) increased production last month by 70,000 barrels per day (bpd) to 32.64 million bpd, a new high for the year. Although the sanctions don't officially take effect until November, Iran is already seeing customers flee as the USA imposes penalties on buyers after Trump quit a nuclear accord with the country. "Yet, we remain much more concerned about the ongoing USA sanctions on Iran", analysts at Bank of America Merrill Lynch said in a research note published last week.

China said it would hit back if the United States takes further steps on trade.

U.S. President Donald Trump has sought to ratchet up pressure on China for trade concessions by proposing a higher 25 percent tariff on $200 billion worth of Chinese imports.

The EIA also reported US crude exports posted the biggest decline on record last week, while USA crude production fell for the first time since February.

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