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Published: Fri, August 10, 2018
Economy | By Melissa Porter

Oil holds gain near $69 amid declining U.S. crude inventories

Oil holds gain near $69 amid declining U.S. crude inventories

Brent was down 0.6% to just above $74 a barrel. Prices dropped $2.37 to settle at $72.28 on Wednesday. Starting in July, South Korea is halting Iranian oil imports for the first time since 2012 amid pressure from the United States to discontinue purchases from Iran. Meanwhile, the production of Syncrude Canada's offline on its sands facility is impacting the market.

US West Texas Intermediate (WTI) crude futures were up 1 cent at.02 barrel. Earlier today, crude oil sold off after it was announced that Saudi Arabia has resumed oil shipments through the Red Sea shipping line of Bab al-Mandeb over the weekend.

Refiners in China are unlikely to increase purchases of American crude even after the Ministry of Commerce removed oil from its list of USA goods slated for tariffs, according to Michal Meidan, an analyst with Energy Aspects Ltd. USA crude CLc1 fell 13 cents to $66.81 a barrel.

Futures in NY were little changed after sliding 3.2% on Wednesday. The commercial crude inventory is about 1% below the five-year average for this time of year.

Prices of the barrel of the West Texas Intermediate are trading on a weaker footing today after the EIA reported United States crude oil inventories decreased less than initially estimated by 1.351 mbpd during the week ended on August 3.

China surpassed the U.S. in annual gross crude oil imports in 2017, importing 8.4 million bpd compared with 7.9 million bpd for the U.S. China had become the world's largest net importer (imports minus exports) of total petroleum and other liquid fuels in 2013.

Net U.S. crude imports fell last week by 358,000 barrels per day.

U.S. crude stocks fell 1.35 million barrels the week ending August 3, falling short of the 3.7-million barrel decline expected by analysts polled by S&P Global Platts, and well below the 6 million-barrel decline reported by the American Petroleum Institute Tuesday evening. This is something that the market desperately needed, after getting slammed the previous day.

Some sources have said with exports falling, Iran's domestic refinery runs have increased, with a pick-up in gasoline output observed at some of its refineries, and more barrels are expected to go onto floating storage. Friday's Baker Hughes crude oil rig count was down slightly from last week, reducing the number of oil rig counts from 861 to 859. Iran's oil exports to India rose by more than 40,000 b/d from June to 706,452 b/d in July.

Despite the decline in rig counts, the downward trend in oil prices continued on Friday. Spot Brent crude oil futures were at $73.88 per barrel at 0241 GMT on Tuesday, up 13 cents, or 0.2 percent, from their last close.

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