The U.S. Energy Information Administration (EIA) on Wednesday reported a large build in crude oil inventories and a production decline in the week ending July 27. OPEC has responded with boosting supply, but we are yet to see how much Iranian supply would be choked off, Croft said, adding that "it's going to be very significant".
The survey shows Saudi Arabia's output was below the 10.8 million barrels a day threshold that the kingdom was said to be indicating it would pump in July, suggesting demand for its oil isn't as strong as initially expected. US Crude oil exports have fallen right off the table from last week's 2.7 million barrels per day to only 1.3 million barrels per day while clocking the slowest reading since April.
In the statement on Wednesday, a day ahead of monthly oil and gas output data publication, Novak said that Russian Federation was pumping on average 40,540 bpd less in July compared to October 2016, a cut-off month for the OPEC+ deal.
"South Korean refiners are turning to USA crude because of Iran sanctions".
In the previous week, total USA inventories rose 3.8 million barrels, while supplies at Cushing fell 1.3 million barrels.
A mixed U.S.jobs report and data showing total OPEC production were offsetting supply-side strains and left the price of oil searching for direction early Friday.
The EIA now estimates that the June production would be 10.900 million bpd, but the revision to the May figure suggests that the output for June could be lower than the expected 10.9 million bpd, according to Bloomberg. 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.
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Meanwhile, a US decision to scale back fuel standards would lead to higher demand, though that could be balanced by trade tensions between the United States and China.
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 US believes Iran is preparing to carry out a major exercise in the Gulf in coming days, apparently moving up the timing of annual drills amid heightened tensions with Washington, US officials told Reuters on Wednesday.
U.S. President Donald Trump's decision to pull out of an global nuclear deal and reimpose sanctions on Iran has angered Tehran.
US crude oil imports averaged 7.75 million barrels per day last week, maintaining the levels of the previous week.
"It is nearly certain that China will impose additional duties on oil and refined products imported from the U.S. if the Trump administration implements additional tariffs on the next tranche of Chinese goods".
At the Multi Commodity Exchange, crude oil for delivery in September rose by Rs 15, or 0.33 per cent, to Rs 4,580 per barrel in a business turnover of 16 lots.