Published: Fri, August 10, 2018
Money | By Ethel Goodwin

U.S. crude stockpiles fall less than expected

U.S. crude stockpiles fall less than expected

Crude inventories fell by 1.4 million barrels in the last week, compared with analysts' expectations for a decrease of 3.3 million barrels.

China's announcement came just a day after the U.S. Trade Representative's office released a finalized list of $16 billion worth in Chinese goods that will be hit with tariffs, effective August 23.

On top of that, Iranian President Hassan Rouhani has threatened to disrupt regional oil production and exports if the Trump administration follows through with oil sanctions.

"Of course, such decisions being taken by the USA side are absolutely unfriendly and can hardly be associated with the. constructive atmosphere achieved at the latest meeting of the two presidents", he was quoted by Russian news agency Tass as saying.

China is rather looking to compensate for the decline in demand that Iran sees in its oil as other nations might halt imports amid United States threats.

Spot Brent crude oil futures were at $74.08 per barrel at 0624 GMT on Tuesday, up 33 cents, or 0.4 percent, from their last close.

Brent and West Intermediate Texas crudes traded generally sideways last week, despite the pronounced weakness at the end of the week.

Crude has struggled to gain near $70 this month after retreating from the highs of June as the United States and China showed no sign of backing down from the trade fight, raising concerns over global economic growth. If more oil leaves the market than expected then the bulls will win the supply/demand battle.

"The market is supported by concerns the sanctions on Iran are going to reduce Iranian supply", said Tony Nunan, oil risk manager at Mitsubishi in Tokyo.

USA sanctions on Iran's energy sector are set to be re-imposed after a 180-day "wind-down period" ending on November 4.

Syncrude Canada's nameplate capacity stands for roughly 10 percent of the Canadian crude oil supply.

Official U.S. fuel storage data is due later on Wednesday from the Energy Information Administration.

Furthermore, oil prices were dragged down by the increasing output of the Organization of the Petroleum Exporting Countries (OPEC) and Russian Federation. Helping to underpin prices is the first round of US sanctions against Iran which came into effect earlier in the week.

Further out, Weekly Distillate Stocks rose by 1.230 mbpd and Gasoline inventories unexpectedly increased by 2.900 mbpd.

Currently, the company, as well as other state-owned oil firms, buy crude oil from the USA on a spot or current tender basis which comprises one shipload of oil.

Prior to this deal, International Olympic Committee had struck deals for importing 10 million barrels from six cargoes in the spot market.

The ratcheting up of trade tensions between the US and China could also help oil buyers in India, the world's third-biggest crude consumer, according to Interfax's Kumar.

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