Rise in US stockpile sees oil prices sink

Rise in US stockpile sees oil prices sink

Rise in US stockpile sees oil prices sink

Trump has been seeking to pad the oil market after he withdrew the USA from the Iran deal, a 2015 pact that lifted sanctions on the country in exchange for restraints on its nuclear weapons program.

A "witches' brew" of factors supposedly pointing towards a tightening crude market - despite massive output in July from the Organization of the Petroleum Exporting Countries (OPEC) - was responsible for USA crude rising 2.1 percent on Monday after four straight weeks of losses for the benchmark.

The analysts expect oil prices to remain range-bound throughout 2018 and in 2019, as lower Iranian supply and lower stocks will continue to be bullish factors, while trade tensions that could hurt oil demand and market sentiment, coupled with rising US oil production would keep a lid on prices.

He said oil prices, which Trump has been pressuring the Organization of the Petroleum Exporting Countries to bring down by raising output, will rise unless the United States grants waivers to buyers of Iranian crude.

Oil prices jumped Monday as markets weighed OPEC production hitting its highest level this year against a war of words between the U.S. and Iran.

Oil prices fell about 2 percent on Wednesday as a surprise increase in USA crude stockpiles fed concerns about global oversupply, while investors anxious that trade tensions could hit energy demand.

Saudi Arabia agreed to try to help make up for losses from USA sanctions on Iran, the third-largest member of OPEC, but analysts question whether the unofficial OPEC leader could reach the president's implied production level of 12 million barrels per day.

Last month, Brent fell more than 6 percent and USA crude slumped about 7 percent, the biggest monthly declines for both benchmarks since July 2016.

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My expectation for the West Texas Intermediate oil price for August is the same as it was for July, namely WTI will range between $65 and $75 per barrel.

Brent crude futures LCOc1 fell $1.82 to settle at $72.39 a barrel, a 2.5 percent loss.

A volley of saber-rattling tweets had raised tensions in oil markets, which are already concerned about supplies as USA sanctions coming back into force in November aim to choke off Iranian oil exports.

On Monday, a Reuters survey found that OPEC production reached a 2018 high in July.

That day, Treasury Secretary Steve Mnuchin eased the market's concerns about oversupply, saying the administration would consider allowing some oil buyers to reduce their purchases from Iran more gradually.

Saudi Arabia suspended oil supplies across the strait last week after Houthis attacked two Saudi oil tankers.

Yemen's Houthi group said it was ready to unilaterally halt attacks in the Red Sea to support peace efforts. "Even though trade war worries were eased between the USA and European Union this week, they still loom large with China, weighing on prices". Trade tensions between the United States and its economic partners are also weighing down on prices due to the potential impact on economic growth and energy demand.

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