Oil: OPEC Production Climbs As Saudi Arabia Pumps More

Crude Oil Rallies on Reported Cushing Drawdown

39;The news event was storage at Cushing,' Bob Yawger director of the Futures Division with Mizhuo Americas told Rigzone

According to a report from the U.S. Energy Information Administration, U.S. crude oil inventories rose by 3.8 barrels last week.

The West Texas Intermediate (WTI) for September delivery lost 0.47 USA dollar to settle at 68.49 dollars a barrel on the New York Mercantile Exchange, while Brent crude for October delivery erased 0.24 dollar to close at 73.21 dollars a barrel on the London ICE Futures Exchange.

The increase in American oil shipments follows the world's fifth-largest oil importer halting Iran crude loadings from July, ahead of US sanctions, while its refiners are also seeking cheaper alternatives to Iraq's Basra crude. China's Unipec, the trading arm of state oil major Sinopec, has suspended crude oil imports from the United States due to a growing trade spat between Washington and Beijing, three sources familiar with the situation said on Friday.

Saudi Arabia, Russia, Kuwait and the United Arab Emirates have increased production, as agreed at a meeting in June, to help to compensate for an anticipated shortfall in Iranian crude supplies once USA sanctions take effect.

US 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.

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Data released by ClipperData on Wednesday showed July's US oil deliveries to China fell to roughly 280,000 barrels per day (Bpd), compared to around 480,000 Bpd in June.

For oil prices, EIA expects Brent Crude spot prices to average $73 a barrel in the second half of 2018 and $69 per barrel in 2019, with WTI Crude averaging $6 a barrel lower than Brent prices in the second half of 2018 and $7 per barrel lower in 2019. Saudi Arabia produced at record levels and support from Kuwait and the United Arab Emirates made up for losses elsewhere in the market.

Oil prices are also feeling the effects of tensions over global trade, which could cause economic growth to slow.

Trump has turned up pressure on China for trade concessions by proposing a higher 25 percent tariff on $200 billion of Chinese imports.

OPEC+ may discuss whether a bigger production increase is needed when they meet in September, Novak said last month.

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Sanctions will also be reapplied to USA imports of Iranian carpets and foodstuffs and on certain related financial transactions. However, only 13 planes have been delivered since sanctions on Iran were lifted under the nuclear pact.

A Kuwaiti official said the country increased production in July by 100,000 bpd from June's average.

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

"Under different scenarios, Iranian supplies could drop as much as 0.8 million barrels per day". OPEC, plus Russian Federation and other allies, decided in June to ease supply cuts in place since 2017.

This is published unedited from the PTI feed.

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