Oil trades higher after two days of heavy losses

02 Aug, 2018 8:44 am

TOKYO (Reuters) – Oil prices rose on Thursday, recouping a portion of the losses of the last two days that were driven by reports showing surprise gains in US inventories of crude, along with mounting concern over trade friction between the US and China.

Brent crude futures LCOc1 were up 25 cents, or 0.4 percent, at $72.64 a barrel by 0055 GMT, after dropping 2.5 percent .

US West Texas Intermediate (WTI) crude CLc1 futures increased by 26 cents, or 0.4 percent, to $67.92 a barrel. They fell $1.6 percent in the previous session.

US crude inventories USOILC=ECI rose 3.8 million barrels last week as imports jumped, the government’s Energy Information Administration said. Analysts polled by Reuters had expected a decline of 2.8 million barrels.

There were some bullish elements in the report, notably gasoline stocks USOILG=ECI declining by 2.5 million barrels.

Also, crude stocks at the Cushing, Oklahoma, delivery hub for WTI futures USOICC=ECI were down, dropping by 1.3 million barrels, EIA data showed.

On Tuesday, the EIA reported that US crude production fell 30,000 barrels per day to 10.44 million bpd in May.

Nonetheless, the tough talk from Washington on trade with China has put pressure on oil prices.

US President Donald Trump sought to ratchet up pressure on China for trade concessions by proposing a higher 25 percent tariff on $200 billion worth of Chinese imports, his administration said .

China said it would hit back if the United States takes further steps on trade.

Brent prices fell more than 6 percent and US crude slumped about 7 percent, the biggest monthly declines for both benchmarks since July 2016.

Brazilian oil exports hit a record in July, nearly three times its shipments in June and 50 percent higher than a year earlier, government data showed .

Iraq exported 3.543 million barrels per day (bpd) of crude from its southern ports in July, slightly above the June average, the oil ministry said .

Russian oil production last month was on average above the level Moscow promised following the Organization of the Petroleum Exporting Countries and non-OPEC meeting in June, energy minister Alexander Novak indicated.

Novak said that higher production was needed to maintain the market’s stability.

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