Oil slips as trade dispute outweighs US stock decline

Oil slips as trade dispute outweighs US stock decline

Oil slips as trade dispute outweighs US stock decline

Oil is poised for its first weekly gain in two months as shrinking United States crude inventories, a strike in the North Sea oil and gas fields and looming sanctions on Iran point to tighter supplies.

Brent crude oil futures were at $74.50 per barrel at 0105 GMT, up 7 cents from their last close.

Around one hour after the report was released, West Texas Intermediate (WTI) October delivery traded at 67.40 USA dollars at New York Mercantile Exchange, up 1.56 dollars or 2.37 percent from its Tuesday settlement. This demand is coming mainly from China and India, with Chinese imports of U.S. crude having more than doubled since the beginning of 2017.

President Donald Trumppulled the US out of a 2015 worldwide agreement to curb Iran's nuclear program in May, setting the stage for the reimposition of economic sanctions on the Islamic Republic.

"Investors remain cautious as Wednesday's surprise gain in US stockpiles remained fresh in their minds", the bank said on Friday.

But prices have come down since then in the wake of plans by the Organization of the Petroleum Exporting Countries and partner producers like Russian Federation to begin ramping up crude output after more than a year of holding back production.

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Gasoline stocks rose by 1.2 million barrels, compared with analysts' expectations for a 488,000-barrel drop.

In options activity, December 2018 puts for oil at $50 a barrel traded, though the volume was thin with just a few hundred contracts exchanged, said Bob Yawger, director of futures at Mizuho in NY.

A weaker United States dollar makes oil, which is priced in dollars, less expensive to buyers in other currencies.

The dollar fell after Federal Reserve Chair Jerome Powell said steady rate hikes are the best way to protect the US economic recovery.

But even with upgrades to infrastructure, the full capacity of exports is limited on the Gulf Coast because most can't load the larger crude oil vessels, the EIA said. Oil production will stop during the strikes. At the beginning of August, oil prices started their longest weekly losing streak in three years.

Hedge funds and other money managers cut their bullish wagers on US crude futures to the lowest level since mid-June. The level was the lowest since the week ended June 19.

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