Economy

Oil turns positive as US inventories seen lower

Oil turns positive as US inventories seen lower

On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.3% at $69.16 a barrel.

Distillate stockpiles, which include diesel and heating oil, rose by 3 million barrels, versus expectations for a 264,000-barrel increase, the EIA data showed.

Meanwhile, Opec's July output climbed as Saudi Arabia pumped near-record volumes and Russian Federation boosted production to levels not seen since it joined the cartel in a coordinated cut two years ago.

Crude palm oil prices went down by 0.30 per cent to Rs 595.50 per 10 kg in futures market today as speculators cut down positions in line with weak Malaysian palm oil prices and on muted spot demand.

United States crude inventories rose by 3.8 million barrels last week as exports declined, creating the largest increase in Gulf Coast stocks since March, the Energy Information Administration said.

The decision has helped to put a lid on a price rally, with crude futures falling more than 7 percent since climbing above $80 a barrel in May. The actual record was a build that surprised the market.

Low stocks were still providing a floor as overall USA crude inventories are below the 5-year average of around 420 million barrels.

The nation's production may remain around the 11.2 million barrels a day level for the remainder of the year, the government official said, citing the oil ministry's most recent calculations.

It was gathered that the Arabic nation's production increased by 230,000 barrels daily in July to 10.65 million barrels per day.

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US crude ended the week down 0.4 percent, while Brent has fallen 1.5 percent in the week so far.

Alongside Russia, OPEC kingpin Saudi Arabia and other members of the Middle-East dominated oil cartel agreed in late June to begin increasing production by up to 1 million barrels per day starting in August.

Oil prices rose on Thursday, steadying after losses over the past two days from a surprise increase in US crude inventories and renewed concerns over trade friction between the USA and China, Reuters reports.

"Unipec saying they won't buy USA crude and China saying they won't comply with Iran sanctions are bearish", Jakob from Petromatrix said.

Oil prices are also being pressured by concern that global trade tensions could crimp economic growth.

Trump has turned up pressure on China for trade concessions by proposing a higher 25 percent tariff on $200 billion of Chinese imports and China has said it will retaliate.

Crude oil prices were mixed ahead of the start of US trading on Friday.

During the first half of the year, China imported an average of 330,000 Bpd from US producers.