Economy

Oil prices fall as OPEC boosts supplies

Oil prices fall as OPEC boosts supplies

The return of sanctions on Iran was one of the reasons why the experts raised again-for a tenth consecutive month-their oil price forecasts for WTI Crude and Brent Crude prices, which are now expected to average $67.32 a barrel and $72.87 a barrel this year, respectively.

Prices had tumbled to a six-week.

The weekly estimates for May all point to more than 10.7 million bpd of crude oil production, but the more accurate-albeit lagged-data, based on survey of producers, shows that US oil output had trailed projections by around 300,000 bpd.

A mixed U.S.jobs report and data showing total OPEC production were offsetting supply-side strains and left the price of oil searching for direction early Friday.

Saudi Arabia, Russia, Kuwait and the United Arab Emirates have increased production, as agreed at a meeting in June, to help to compensate for an anticipated shortfall in Iranian crude supplies once USA sanctions take effect.

Price differentials for the medium-sour Mars grade to Dubai quotes on arrival in North Asia have fallen to 50 cents to $1 a barrel, down from indications of $1-$1.50 at the start of July, partly as China avoided US crude due to potential import tariffs.

According to two officials, the US hasn't been able to persuade China to reduce Iranian oil purchases, but Beijing has reportedly agreed not to increase its oil imports from Iran, Bloomberg reports.

More news: Israel kills seven militants amid tensions on Syria's border

Total motor gasoline inventories decreased by 2.5 million barrels last week, but still about 1.4 percent above the levels of the same week previous year. US Crude oil exports have fallen right off the table from last week's 2.7 million barrels per day to only 1.3 million barrels per day while clocking the slowest reading since April.

China said it would hit back if the United States takes further steps hindering trade, as the Trump administration considers slapping a 25 percent tariff on $200 billion worth of Chinese goods.

Even with last week's rise, overall US crude inventories are below the 5-year average of around 420 million barrels. Novak said that higher production was due to the need to maintain the market's stability.

While the Saudis and their Gulf allies said they would increase production to make up for countries unable to, Iran argues that they're violating individual country targets and ultimately betraying the organisation.

OPEC is set to reveal its July production figures in its closely watched monthly oil market report August 13.

In the statement on Wednesday, a day ahead of monthly oil and gas output data publication, Novak said that Russian Federation was pumping on average 40,540 bpd less in July compared to October 2016, a cut-off month for the OPEC+ deal.


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