Crude oil futures gain 0.33% on positive global cues

Muriel Colon
August 6, 2018

But a complete halt to Iranian supplies looks unlikely with Bloomberg reporting on Friday that China, Iran's biggest customer, has rejected a USA request to cut imports from the OPEC member.

Oil prices traded slightly higher on Thursday, reversing course after a report suggested crude stockpiles at the US storage hub at Cushing, Oklahoma fell in the latest week.

U.S. crude inventories rose 3.8 million barrels last week, according to data from the Energy Information Administration.

US crude CLc1 was off by 5 cents at $68.91, after gaining almost 2 percent in the previous session.

The speculator group cut its combined futures and options position in NY and London by 5,287 contracts to 407,001 during the week ending July 31, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. The American Petroleum Institute (API) recently noted that crude oil barrel counts in the United States are back on the rise, expanding last week by over 5 million barrels, erasing several weeks of expectations for steady declines in reserve supplies.

According to a Reuters poll earlier this week, 44 economists and analysts expect the USA sanctions to take between 500,000 bpd and 1 million bpd of Iranian crude oil off the market.

"Oil is holding up reasonably well".


"There are certainly worries about protectionism and its potential economic impact, but we also have to remember that the stimulus from tax cuts dwarfs the tax hit from higher tariffs", he said in a Friday report.

Saudi Arabia's crude oil production in July was around 10.290 million barrels per day, two OPEC sources said on Friday. But a complete halt to Iranian supplies looks unlikely with Bloomberg reporting on Friday that China, Iran's biggest customer, has rejected a USA request to cut imports from the oil cartel Opec member.

Russian oil production last month was on average above the level Moscow promised following the OPEC and non-OPEC meeting in June but only to maintain the market's stability, energy minister Alexander Novak indicated on Wednesday.

USA officials told Reuters on Wednesday that they believe Iran is preparing to carry out a major exercise in the Gulf, apparently moving up the timing due to heightened tensions.

Oil prices are feeling the effects of ongoing tensions over global trade, with markets concerned about any slowdown in growth around the world.

Trump has turned up pressure on China for trade concessions by proposing a higher 25 percent tariff on $200 billion of Chinese imports and China has said it will retaliate. "This could severely dent the competitiveness of USA oil and derivatives in the Chinese market", said Abhishek Kumar, senior energy analyst at Interfax Energy.

That compares with a forecast for a 3-million-barrel decline in a Bloomberg survey of analysts.

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