Oil prices decline amid rising output

Oil Ticks Up to End a Volatile Week

Oil Ticks Up to End a Volatile Week

Oil prices strengthened Thursday, with USA crude gaining almost 2 percent after traders saw an industry report suggesting domestic crude stockpiles would soon decline again after a surprise rise in the latest week.

Crude stocks at the Cushing storage hub in Oklahoma fell by 1.3 million barrels to their lowest level since October 2014, helped to pushed Brent futures to close $1 a barrel higher on Thursday, data from the Energy Information Administration (EIA) showed.

The West Texas Intermediate (WTI) for September delivery lost 1.10 US dollars to settle at 67.66 dollars a barrel on the New York Mercantile Exchange, while Brent crude for October delivery erased 1.82 dollars to close at 72.39 dollars a barrel on the London ICE Futures Exchange.

US crude inventories rose 3.8 million barrels last week as imports jumped, the government's Energy Information Administration said. However, low stocks were still providing a floor as even with last week's rise, overall USA crude inventories are below the five-year average of about 420-million barrels.

Still, oil futures pared losses briefly after the data, which also showed growing U.S. demand.

Net U.S. crude imports rose last week by 1.4 million barrels per day.

Saudi Arabia's oil production grew by 230,000 barrels a day in July to 10.65 million barrels a day, just shy of an all-time peak reached in 2016, according to a Bloomberg survey of analysts, oil companies and ship-tracking data.

Prices of the barrel of the American reference for the sweet light crude oil are grinding lower today, revisiting the mid-$68.00s in the wake of the EIA's weekly report.

After Trump called for a 15 percent increase in tariffs on Chinese goods earlier this week, Beijing on Friday announced it was targeting $60 billion worth of US goods in response.

Oil markets have been halting further declines recently after the energy commodity fell too far, too fast on pumped-up production from OPEC, and supply constraints both within the U.S. overseas have seen oil markets quick to buy, implying that bullish oil traders, while sidelined on rising production, are remaining close at hand.

The Organization of the Petroleum Exporting Countries and partners including Russian Federation had agreed in late 2016 to cut output by 1.8 million barrels per day to rebalance supply and demand.

Novak said that higher production was needed to maintain the market's stability.

While the Saudis and their Gulf allies said they would increase production to make up for countries unable to, Iran argues that they're violating individual country targets and ultimately betraying the organisation.

OPEC is set to reveal its July production figures in its closely watched monthly oil market report August 13.

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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