Supply pressures add up to rally in crude oil prices

Latest US crude oil sentiment data

Latest US crude oil sentiment data

"Prices are moving higher after the API reported a more massive draw than analysts had expected", said Stephen Innes, Head of Trading, APAC at brokerage OANDA.

Crude trading on Thursday resumed a posture more in keeping with previous weeks than in the past few days, with both benchmarks losing some ground due to China imposing 25 percent tariffs on USA products.

Oil prices rose 3%, with Brent crude futures hitting a three-week high. “Crude stocks drew due to sharply lower crude imports and near-record refinery crude runs.”.

Brent crude oil futures were at $72.83 per barrel early on Wednesday, up 20 cents, or 0.3%, from their last close.

USA gasoline stocks rose 1.2 million barrels, while distillate inventories increased 1.8 million barrels, EIA data showed.

Nearly 60 percent of the 6.4 million new barrels of oil pumped every day between now and 2023 will come from the United States, according to the IEA.

The crude oil futures prices in NY went up by 1.2% as the United States government offered 11 million barrels of oil as a part of the regular draw-down schedule.

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Oil also found support from a weaker dollar, which has slipped this week in response to U.S. President Donald Trump's comment that he was "not thrilled" by the Federal Reserve's interest rate increases.

In spite of these bearish factors, analysts said prices were prevented from falling further because of USA sanctions against Iran, which target the financial sector from August and will include petroleum exports from November.

A key index of the dollar versus a basket of other currencies.DXY fell on Friday, boosting the price of oil and other dollar denominated commodities.

Iran has become the third-largest oil supplier for India, which imports more than 80 per cent of its energy needs.

Concerns that an escalating trade war between China and the US could slow economic growth and weigh on crude purchases eased slightly after sources told Reuters that China's Unipec will resume purchases of USA crude oil in October, after a two-month halt due to the fight.

Singaporean bank said on Friday that Chinese data showed a "steady decline in activities" and that "the economy is facing added headwinds due to rising trade tensions with the U.S".

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