Oil prices declined toward lows not seen since late June yesterday after official data showed an unexpected increase in the United States (U.S.) inventories of crude oil that pushed stockpiles back toward the five-year average. Brent crude futures LCOc1 were at $73.42 per barrel, down 3 cents from their last close.
Tensions between the US and Iran are also supporting the market, Barratt said.
Higher crude output from the Saudis, along with Nigeria and Iraq, pushed up total production from the Organization of Petroleum Exporting Countries by 300,000 barrels a day, offsetting losses from a spiraling economic collapse in Venezuela, political clashes in Libya and the onset of USA sanctions against Iran.
Iraq exported 3.543 million barrels per day (bpd) of crude from its southern ports in July, slightly above the June average, the oil ministry said on Wednesday. Gasoline stocks declined by 2.5 million barrels, while crude stocks at the Cushing, Oklahoma, delivery hub for WTI futures fell 1.3 million barrels, EIA data showed.
Despite interruptions in supply from Libya and Venezuela, it is expected that there will be excess supply in the market as Saudi Arabia and Russian Federation have spoken about increasing crude production.
The speculator group cut its combined futures and options position in NY and London by 5,287 contracts to 407,001 during the week ending July 31, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
At a June 22 meeting, OPEC agreed to boost output by returning to 100 percent compliance with oil output cuts that took effect in January 2017, after months of underproduction by countries including Venezuela and Angola.
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The U.S. central bank said "the labor market has continued to strengthen and economic activity has been rising at a strong rate". That's below the 215,000 average for the first seven months this year, but economists said the slip will likely prove temporary.
"Oil is holding up reasonably well".
Oil prices were on the downward trajectory on Tuesday even though Chief Executive Officer, BP, Bob Dudley, said he saw a series of supply-side issues that would be supportive in the short-term, according UPN.
"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.
U.S. President Donald Trump's decision to pull out of an global 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% tariff on $200 billion of Chinese imports and China has said it will retaliate. China has said it will retaliate.
"Oil has been rebounding every time prices fall to near $68 since mid-July", Makiko Tsugata, a senior analyst at Mizuho Securities Co., said by phone.