U.S. Oil Production Isn’t Growing As Fast As Expected

U.S. Oil Production Isn’t Growing As Fast As Expected

A mixed U.S.jobs report and data showing total OPEC production were offsetting supply-side strains and left the price of oil searching for direction early Friday.

But a complete halt to Iranian supplies looks unlikely with Bloomberg reporting on Friday that China, Iran's biggest customer, has rejected a USA request to cut imports from the OPEC member.

Oil prices traded slightly higher on Thursday, reversing course after a report suggested crude stockpiles at the USA storage hub at Cushing, Oklahoma fell in the latest week. USA crude ended the week down 0.4 percent, while Brent has fallen 1.5 percent in the week so far.

Tensions between the USA and Iran are also supporting the market, Barratt said. Over the past four weeks, crude oil imports averaged 8.00 million barrels per day, or 0.4 percent higher than the same four-week period previous year. "A lot of this is the risk premium priced in for Iran and when do we start seeing an impact on supply there", Patterson said.

Russian oil output rose by 150,000 barrels per day in July from a month earlier, surpassing the amount Moscow had said ti would add following a meeting of global oil producers in Vienna in June, energy ministry data showed on Thursday. But a complete halt to Iranian supplies looks unlikely with Bloomberg reporting on Friday that China, Iran's biggest customer, has rejected a U.S. request to cut imports from the oil cartel Opec member.

Oil last month posted the worst loss in two years on concern a trade war between the United States and China could curb economic growth and limit energy demand.

China's Unipec has also suspended purchases of US crude amid the growing trade row, sources said.

The kingdom has been under acute pressure from President Donald Trump to open the taps as he chokes off exports from Saudi's political rival, Iran.

A supertanker arriving South Korea in October for SK Energy hold 500,000 barrels of Mars crude, along with other grades such as West Texas Intermediate (WTI) Midland, the sources said, while GS Caltex bought 2 million barrels of Mars.

"There are a lot of escalation points that could occur very quickly and that worries me", Jonathan Barratt, chief investment officer at Ayers Alliance in Sydney, said.

"It is nearly certain that China will impose additional duties on oil and refined products imported from the USA if the Trump administration implements additional tariffs on the next tranche of Chinese goods".

With WTI crude barrels falling back beneath 68.00, buyers will be looking to halt any further declines into the last swing low at the 67.00 level in hopes of propping prices back over last week's high of 70.40 with eyes on the year's current highs of 75.35, while bears will be looking to drive the action further down into mid-June's lows at 63.50.

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