Economy

Oil gains on USA inventory drawdown, Gulf of Mexico storm

Oil gains on USA inventory drawdown, Gulf of Mexico storm

At 10:42 GMT, September WTI crude oil is trading $59.29, up $1.35 or +2.33%, and September Brent crude oil is at $65.59, up $1.43 or +2.23%.

Oil prices are being pressured by ongoing worries about demand as the U.S.

Rising tensions have brought Iran and the United States close to conflict.

Washington has imposed sanctions that eradicate advantages Iran was meant to obtain in return for agreeing to curbs on its nuclear program below the 2015 take care of world powers. Washington withdrew from the accord previous year and re-imposed sanctions.

Analysts said the rise in crude oil futures was largely in tandem with a firming trend in global trade. That's because supply from outside the OPEC+ group, especially from US shale, continues to grow, inadvertently supported by the restricted supply from OPEC+.

All eyes now remain on the official crude stocks data from the United States government's Energy Information Administration (EIA) due later today at 1430 GMT for near-term trading opportunities.

Investors considering USO or other oil exchange traded products have several factors to consider including the Organization of Petroleum Exporting Countries (OPEC). -China trade dispute-and its impact on global oil demand growth, than the likelihood of a major supply outage. But more importantly, because market participants are now more concerned about the state of the global economy-particularly in a still unresolved U.S. 'President Trump wants to be re-elected and will therefore be prepared to sign a trade deal, probably in 4Q, that doesn't necessarily meet all of his initial demands, ' says Mark Cliffe, Chief Economist and Head of Global Research of the ING Group.

More news: China’s Producer Prices Stall in June, Fuel Deflation Worries

The U.S. and global benchmarks have gained this year as the Organization of the Petroleum Exporting Countries (OPEC) and big producers such as Russian Federation have honoured commitments to cut output.

It was the sixth consecutive month that the EIA revised its 2019 demand forecast.

The decline follows the discovery of contaminated Urals crude that affected the Druzhba pipeline to Europe.

Oil prices were mixed on Monday amid market concerns over heightening geopolitical risks after Iran crossed the 3.67 percent limit of uranium enrichment purity.

USA crude stockpiles fell more than forecast last week, while gasoline inventories decreased and distillate stocks built, data from industry group the American Petroleum Institute (API) showed on Tuesday.

U.S. oil production will continue to break output records into 2020, but may be growing at a slower rate than previously expected, the U.S. Energy Information Administration said in its short-term energy outlook on Tuesday.


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