Markets

USA oil price rises after sharp decline

USA oil price rises after sharp decline

Refiners in China were the top buyers of American crude oil in May, and have been regular importers since the USA revived domestic output and exports in recent years.

US crude was bullish after official data on Thursday showed inventories at Cushing, the delivery point for USA crude futures, fell to their lowest in 3-1/2 years.

The potential trade war between the USA and China comes amid a tight oil market.

"Uncertainties abound when it comes to the oil balance for the remainder of the year", said Stephen Brennock, analyst at London brokerage PVM Oil Associates.

Oil markets opened cautiously lower on Friday ahead of a raft of import tariffs set to be imposed later in the day by the world's two biggest economies, the United States and China.

Benchmark Brent LCOc1 was up 60 cents at $77.71 a barrel by 1020 GMT.

Oil prices were mixed on Monday, with global prices boosted by ongoing supply issues in Libya, while signs of rising output in the USA weighed on West Texas Intermediate crude.

Crude Oil WTI futures for delivery in August traded at $74.8 per barrel, or 0.38 percent higher from their previous close.

On Thursday, the US Energy Administration (EIA) announced that USA crude inventories had risen 1.2 million barrels in the week to June 29, to 417.88 million barrels.

China has indicated that it could place a tariff of 25% on USA oil.




Earlier this month, Reuters also reported that South Korea had upped crude oil imports from Kazakhstan, already looking for alternative supplies as the November 4 deadline for the sanctions draws nearer.

After noting that China holds about $118 trillion in USA debt, Guilfoyle pointed out that "we've got a pretty hot economy" and that China is struggling in comparison: "They have retail sales in the hole. they've got industrial production in the hole, the Shanghai Composite [stock index] is down 17 percent year-to-date".

USA markets also garnered support from a government employment report showing better-than-expected growth in jobs.

US crude oil is not on the list of 545 products the Chinese government has said it would immediately retaliate with in response to American duties.

Shares of top oil marketing companies led the gains on NSE index, as US-China trade war fears weighed on oil prices.

"Looming U.S. sanctions on Iran, however, are causing serious concerns amongst market players".

"The embassy of the Republic of Korea denies any claims that it would not lift any Iranian crude and condensate in July", the South Korean embassy responded to the report.

"At the same time, Venezuela... will lose another 400,000 bpd by year-end with production going to below 1 million bpd", FGE said, adding that another 300,000 bpd of Libyan capacity was disrupted.

Top exporter Saudi Arabia told OPEC it raised oil output by nearly 500,000 barrels per day last month, OPEC sources said, a sign Riyadh wants to make up for shortages elsewhere and dampen prices.


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