Crude palm oil futures gain 0.27%

Devin Lawrence
August 6, 2018

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 USA sanctions take effect.

South Korea's imports of US crude jumped more than fourfold to 14.1 million barrels in the first half of the year from a year ago, according to data from state-run Korea National Oil Corp.

U.S. West Texas Intermediate (WTI) crude futures CLc1 settled down 47 cents at $68.49 a barrel.

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.

Low U.S. stockpiles were still providing a floor for prices, with overall U.S. crude inventories below the five-year average of around 420 million barrels.

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

"Unipec saying they won't buy USA crude and China saying they won't comply with Iran sanctions are bearish", Jakob from Petromatrix said.

Brent crude futures LCOc1 settled up $1.06, or 1.5 percent at $73.45 a barrel.

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"Oil is holding up reasonably well".

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.

"It's a jittery feel here, as long as we have Iranian sanctions uncertainty and tariff uncertainty, and it doesn't take much to spark a significant swing one way or the other", said Jim Ritterbusch, an analyst in Galena, Illinois.

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.

According to two officials, the US hasn't been able to persuade China to reduce Iranian oil purchases, but Beijing has reportedly agreed not to increase its oil imports from Iran, Bloomberg reports.

U.S. President Donald Trump's decision to pull out of an worldwide nuclear deal and reimpose sanctions on Iran has angered Tehran.

Trump has turned up pressure on China for trade concessions by proposing a higher 25 percent tariff on $200 billion of Chinese imports.

“There are a lot of escalation points that could occur very quickly and that worries me, ” Barratt said. "This could severely dent the competitiveness of USA oil and derivatives in the Chinese market", said Abhishek Kumar, senior energy analyst at Interfax Energy. Gasoline stocks USOILG=ECI declined by 2.5 million barrels, while crude stocks at the Cushing, Oklahoma, delivery hub for WTI futures USOICC=ECI fell 1.3 million barrels, EIA data showed.

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