Oil: OPEC Production Climbs As Saudi Arabia Pumps More

Oil: OPEC Production Climbs As Saudi Arabia Pumps More

Oil: OPEC Production Climbs As Saudi Arabia Pumps More

West Texas Intermediate, the United States benchmark for the price of oil, was down 1.51 per cent to $67.72 per barrel.

Oil prices fell about 2 per cent 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. US crude oil production for the month of May stood at 10.442 million bpd, compared to 10.472 million bpd in April. The price for Brent crude oil, the global benchmark, was up 0.23 percent to $73.62 per barrel as of 9:15 a.m. EDT. Crude oil production is now expected to average 11.8 million bpd in 2019. With the production increases made since then, they've succeeded: compliance was at 104 percent in July.

Traders said prices rallied early when industry information provider Genscape reported that crude inventories at the Cushing, Oklahoma, delivery hub for USA crude, dropped 1.1 million barrels since Friday, July 27.

Although many traders still expect the light, sweet crude market to tighten toward the end of the year, investors increasingly seem less convinced.

There were some bullish elements in the report, notably gasoline stocks declining by 2.5 million barrels.

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. Although the sanctions don't officially take effect until November, Iran is already seeing customers flee as the US imposes penalties on buyers after Trump quit a nuclear accord with the country.

On Monday, August 6, the first set of USA sanctions on Iran will snap back, so we will be probably looking at tougher actions over August and September, Croft said.

Moreover, a broadly firmer US dollar and intensifying US-China trade dispute also weighs negatively on the higher-yielding oil.

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.

On Friday, the U.S. Department of Labor reported total non-farm payrolls increased 157,000 in July, lower than the net average gain of 203,000 over the last 12 months.

The higher supplies from OPEC and Russian Federation are contributing to growing signs of a new glut in the oil market and that is adding to concern a trade war between the US and China could curb economic growth and limit energy demand, which drove crude to the biggest decline in two years last month.

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.

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