Oil prices gain as US drillers cut oil rigs

Oil prices gain as US drillers cut oil rigs

Oil prices gain as US drillers cut oil rigs

The expiring U.S. West Texas Intermediate (WTI) crude for August delivery settled up $1.00 at $70.46 a barrel, while the more liquid September contract rose 2 cents to $68.26 a barrel.

Benchmark Brent crude oil fell $1.07 to a low of $71.83 a barrel before recovering a little to trade around $71.90 by 1045 GMT. Saudi Arabia also cut last week its official selling prices (OSPs) by US$0.20 for most of its grades to the Asian markets for August.

But in the run-up to such an important election, will Trump accept the risk of a rise in oil prices because of a halt to Iran's crude exports? Although, markets edged up on Friday in the wake of Saudi Arabia moving to allay some fears of oversupply. For decades, the WTI contract based in Cushing, has been the benchmark for USA oil prices, but Houston has surpassed Cushing in terms of importance.

Prices have been dragged down by concerns about oversupply as some production returned after outages, while trade tensions between the United States and China stoked fears of damage to their economies and commodities demand.

Trade tensions continued to weigh on the market, providing a ceiling for any gains, traders said.

Futures rose as much as 2.1% in NY on Thursday, reversing early-morning losses.

The South Asian nation is already buying more crude from the USA, data from the Census Bureau and Energy Information Administration show. Japanese suppliers of Iranian oil - JXTG Holdings and Idemitsu Kosan - received a warning from the USA about the need to completely stop imports by November 4, 2018, when Washington plans to resume sanctions against Tehran.

US crude stocks surprised the market and rose by 5.8 million barrels last week as oil production hit 11 million barrels a day (MMBPD) for the first time ever, the Energy Information Administration said Wednesday.

"This is a market where the increase in GCC and Russian supplies has come at a time when the refinery bid is lacking", said Amrita Sen, Energy Aspects' chief oil analyst.

The US and her allies aren't helping because low oil prices mean fracking to produce shale oil has suddenly become profitable and weaning America off dependence on OPEC.

"Even though the overall crude number was bearish, the gasoline numbers and distillate numbers were pretty bullish", said Phil Flynn, an analyst at Price Futures Group in Chicago, Reuters reported. They rose 5.8 million barrels last week, compared to a forecast for a decline of 3.6 million barrels.

Saudi Arabia boosted production sharply last month, raising crude shipments to world markets by 390,000 bpd to 7.6 million bpd, Kpler tanker-tracking data showed.

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