Oil recovers in Asia trade after slumping to 3-month lows

Oil recovers in Asia trade after slumping to 3-month lows

Oil recovers in Asia trade after slumping to 3-month lows

U.S. West Texas Intermediate (WTI) was 70 cents higher, or 1 percent, settling at $69.46.

Oil rose in response to the ministry's statement and Brent crude, the global benchmark, was 0.5 percent higher at $72.92 a barrel in London as of 8:13 a.m. on Friday.

Oil prices gained on Friday after Saudi Arabia's OPEC governor said the kingdom's exports are likely to fall next month and inventories may be squeezed in the third quarter.

Figures showing refineries processing plenty of crude and stockpiles dropping at the Cushing, Oklahoma, delivery hub also supported the market, said John Kilduff, founding partner at energy hedge fund Again Capital.

API warned though that recent tariffs placed on steel and iron imports could harm the oil and gas industry's success. Ultimately, the price hike serves the interest of oil-dependent economies like Saudi Arabia, Russia and Iraq, especially since they can serve as substitutes for Iranian oil. This making traders nervous because it suggests not only a trade war, but a currency war may be brewing.

Futures in NY were little changed on Thursday after rebounding 1% in the previous session from a 1.5% drop.

According to the Weekly Petroleum Status Report, U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, increased by 5.8 million barrels during the week ending July 13. "We don't have any problem selling our oil [to China]".

U.S. petrol inventories dropped by 3.2-million barrels last week, while distillate stockpiles, which include diesel and heating oil, declined by 371,000 barrels, the Energy Information Administration said.

The official's sentiment is a major step back from the bold U.S. policy objective of reducing Iranian oil exports "to zero" following President Trump's withdrawal from the Iranian nuclear deal in May.

Prices had gained earlier after the Energy Information Administration reported gasoline held in United States storage tanks dropped last week by the most since May on the back of strong fuel demand, countering a surprise gain in nationwide crude inventories.

Saudi Arabia boosted production sharply last month, raising crude shipments to world markets by 390,000 bpd to 7.6 million bpd, Kpler tanker-tracking data showed.

"Record production USA crude oil and natural gas liquids last month highlighted the strength of our nation's energy renaissance", said API Chief Economist Dean Foreman. Nonetheless, the jump in crude inventories may suggest that U.S. production is able to keep up with strong demand.

Goldman still thinks that Brent could retest the $80 a barrel market, but only late this year, instead of in the summer, depending on US oil policies. The gains represent a rapid increase in output, as the data, if confirmed by monthly figures, puts the United States as the second largest producer of crude oil, just behind Russian Federation, which was producing 11.2 million bpd in early July.

Today, API released its monthly statistical report for June of 2018 highlighting that USA production of crude oil and natural gas liquids hit its highest level ever.

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