Oil prices pull back as trade tensions weigh on market

The USA through May 2018. The upward surge has stalled for the last two months. U.S. production was down 30,000 bpd in May

The USA through May 2018. The upward surge has stalled for the last two months. U.S. production was down 30,000 bpd in May

According to a Reuters poll earlier this week, 44 economists and analysts expect the US sanctions to take between 500,000 bpd and 1 million bpd of Iranian crude oil off the market. Phil Flynn, a market analyst at the PRICE Futures Group in Chicago, said in a daily emailed market report that was supporting the spike in prices on Thursday.

U.S. West Texas Intermediate (WTI) crude CLc1 futures increased by 6 cents, or 0.1 percent, to $67.72 a barrel.

However, low stocks were still providing a floor as even with last week's rise, overall US crude inventories are below the 5-year average of around 420 million barrels.

Analysts said widening of positions by participants amid pick up in spot demand against tight stocks position on restricted supplies from overseas markets mainly kept crude palm oil prices higher at futures trade.

The weekly estimates for May all point to more than 10.7 million bpd of crude oil production, but the more accurate-albeit lagged-data, based on survey of producers, shows that USA oil output had trailed projections by around 300,000 bpd.

Crude oil prices moved up by 0.33 per cent to Rs 4,580 per barrel in futures market today as participants raised bets, tracking a firm trend in the global markets.

"Oil is holding up reasonably well". 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".

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Saudi Arabia, Russia, Kuwait and the United Arab Emirates have increased production to help to compensate for an anticipated shortfall in Iranian crude supplies once planned US sanctions take effect later this year. Iranian officials have warned the country would not easily yield to a renewed USA campaign to strangle Iran's vital oil exports.

The United States, China and India have previously urged oil producers to release more supply to prevent an oil deficit that could undermine global economic growth.

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.

"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".

Overall US crude oil inventories actually rose by 3.8-million barrels last week to 408.74-million barrels, the EIA data showed.

The country's top two refiners SK Energy and GS Caltex bought 2 million barrels of USA crude each for October arrival, while its smallest refiner Hyundai Oilbank has also purchased 2 million barrels of medium-sour Mars crude for the first time, the sources said.

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