Brent crude falls as oversupply fears mount

Saudi Arabia is expecting a reduction in crude oil exports next month, despite earlier signs that Saudi Arabia-and Russia-have started to raise production even before the June 22 meeting with OPEC that sought to address the shrinking global oil supply and corresponding rising prices.

Brent crude, the global benchmark, was 0.3 per cent higher at $73.13 a barrel.

Saudi Arabia’s pledge to keep its crude production steady from June to July follows an agreement last month between Opec and its partners including Russian Federation to boost production by 1 million barrels a day.

Al-Aama described concerns that Saudi Arabia and its partners are moving to substantially oversupply the market as “without basis”, explaining that the Kingdom is committed to working with its partners in the Declaration of Cooperation. This statement created a feeling of emergency, and oil prices jumped by more than 3.5 percent.

The market also got a boost from reports rebels in Yemen attacked an oil facility in Saudi Arabia, Kilduff told CNBC.

Japanese oil refiners will likely stop loading Iranian crude by mid-September with final shipments arriving in the first half of October, the head of the nation’s oil refiners association said on Thursday, as the USA pressures countries to halt such imports.

Trade tensions between the USA and China have stoked fears of damage to their economies and commodities demand. At this point, I think that we will have value hunters coming into this market for a short-term rally.

Futures in NY were little changed on Thursday after rebounding 1% in the previous session from a 1.5% drop.

Saudi crude exports fell by about 500,000 barrels a day to 6.7 million in the first half of July compared with the same period in June, tanker tracking by Bloomberg shows.

The US government is sensitive about hikes in oil prices on the threshold of the country’s important by-elections. US West Texas Intermediate (WTI) was $1.11 higher at $69.89.

USA crude oil imports averaged 9.1 million barrels per day last week, up by 1,635,000 barrels per day from the previous week.

Of course, not everyone is convinced that oil prices are on a steady decline as many (including USA president Donald Trump, who wants to give American motorists a break at the pump, and countries such as India with their growing but fragile economies) have called for: Daryl Guppy, a trader an author, told CNBC that technical analysis shows oil heading for a rebound.

“The impact on world economic growth of a levy of this magnitude will be severe and will likely have a strong negative impact on markets”, said Olaf van den Heuvel, chief investment officer at Aegon Asset Management.

Production of crude topped 10.7 million barrels per day with production of natural gas hitting 4 million barrels per day, according to an analysis released by the American Petroleum Institute (API) Thursday. Nonetheless, the jump in crude inventories may suggest that USA production is able to keep up with strong demand.

Crude oil futures were edging between gains and losses on Friday morning in Europe, as the market searched for direction amid comments from Saudi Arabia that the producer will not flood the market with oil as production cuts ease and the end of the Norwegian oil field workers strike.