Oil prices mixed after inventory-fueled spike

Oil prices mixed after inventory-fueled spike

Oil prices mixed after inventory-fueled spike

"Yesterday you had a strong rebound supported by Cushing but there's not a lot else that is driving prices higher so we are seeing a bit of a correction", Olivier Jakob at Petromatrix consultancy said.

In Vienna in June, OPEC and other producers led by Russian Federation agreed to ease global output cuts, adding around 1 million barrels per day (bpd) to the market from July 1. Brent crude futures LCOc1 settled at $73.21 per barrel, down 24 cents from their last close.

The question regarding Iranian oil supply now is, can the Trump Administration get everybody else except China, which has already said it won't recognize US sanctions on Iran, out of the market, according to the strategist.

According to the Weekly Petroleum Status Report, U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve (SPR), increased by 3.8 million barrels last week. Additionally, he said, US monthly figures for production fell in May, suggesting that output may be curbed later in the year, he said.

"Trade volume is pretty low in futures today".

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.

USA crude loadings for South Korea have been rising since July and arrivals are expected to reach 6 million barrels in each of September and October, the highest ever, according to the sources and trade flow data on Thomson Reuters Eikon.

"At the moment, there is a mismatch in timing, where there is increasing OPEC supply and yet we're not seeing a significant reduction in Iranian supply", Patterson said.

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.

The price jump earlier this summer had come about in large part because of President Donald Trump 's decision to pull the US out of an global agreement to curb Iran's nuclear program.

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.

Crude oil prices were mixed ahead of the start of US trading on Friday.

“There are a lot of escalation points that could occur very quickly and that worries me, ” Barratt said.

With WTI crude barrels falling back beneath 68.00, buyers will be looking to halt any further declines into the last swing low at the 67.00 level in hopes of propping prices back over last week's high of 70.40 with eyes on the year's current highs of 75.35, while bears will be looking to drive the action further down into mid-June's lows at 63.50.

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