Oil rallies on expectation inventories will drop

  • Oil rallies on expectation inventories will drop

Oil rallies on expectation inventories will drop

Oil prices were steady on Friday, supported by traders placing new hedges in the futures market in anticipation of a decline in USA crude inventories, but held back from advancing by the prospect of rising global supplies.

An oil tanker unloads crude oil at a crude oil terminal in Zhoushan, Zhejiang province, China July 4, 2018.

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.

USA crude oil production for the month of May stood at 10.442 million bpd, compared to 10.472 million bpd in April.

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. USA crude CLc1 rose $1.30, or 1.9 percent, to $68.96 a barrel.

Crude palm oil prices went up by 0.27 per cent to Rs 590.50 per 10 kg in futures trade today as speculators widened their positions amid firm demand at the spot market.

Futures reversed course after falling early in the session on concerns about oversupply.

The oil market is set to tighten further before the end of this year - a sign that OPEC's early response to boost supply may not be enough to offset a significant (possibly 1 million bpd barrel) loss of crude oil supply from Iran, Helima Croft, RBC Capital Markets global head of commodity strategy, told CNBC on Friday.

"Oil is holding up reasonably well". Under constant pressure from US President Donald J. Trump to cool prices, Opec and its allies are fulfilling a pledge made in June to increase output to ease concerns over potential supply disruptions in countries such as Iran and Venezuela. But a complete halt to Iranian supplies looks unlikely with Bloomberg reporting on Friday that China, Iran's biggest customer, has rejected a United States request to cut imports from the oil cartel Opec member.

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

"There are a lot of escalation points that could occur very quickly and that worries me", Jonathan Barratt, chief investment officer at Ayers Alliance in Sydney, said.

China has said it plans to impose tariffs on liquefied natural gas, raising concerns that it could also impose tariffs on oil, said John Kilduff, partner at Again Capital Management in NY. "This could severely dent the competitiveness of US oil and derivatives in the Chinese market", said Abhishek Kumar, senior energy analyst at Interfax Energy.

The U.S. Energy Information Administration (EIA) on Wednesday reported a large build in crude oil inventories and a production decline in the week ending July 27.