Economy

Supply pressures add up to rally in crude oil prices

Supply pressures add up to rally in crude oil prices”

Brent crude oil was up 2 cents a barrel at $74.80 by 11:13 a.m. EDT [1513 GMT].

Crude oil prices were in rally mode before the start of US trading after signs of another drain on domestic oil and gasoline inventories.

USA oil prices went up 3.07 percent on Wednesday as a result of higher-than-expected decrease of crude oil stocks in last week and weaker US dollar against main currencies.

"The strength is really primarily from the weak dollar and also you're getting another week of expectations that you will see crude stocks drop", said Gene McGillian, manager of market research at Tradition Energy.

U.S. West Texas Intermediate (WTI) crude futures were up 27 cents, or 0.41 percent, at $66.11 per barrel.

In its report obtained by Vanguard, yesterday, the American Petroleum Institute stated that United States crude stocks fell last week by 5.2 million barrels.

SP Global Platts says that "this leaves the door wide open for tariffs on two major USA energy commodities exported to China in the next round - crude oil and LNG". Refinery utilization rates USOIRU=ECI remained unchanged last week at 98.1 percent of total capacity, the highest rates since 1999.

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. 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.

The prospect of a drop in oil exports from Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries, in response to new U.S. sanctions was also supporting the market.

"The Iran issue continues to occupy traders' minds", said Greg McKenna, chief market strategist at futures brokerage AxiTrader.

US sanctions are having a strong effect on Iran's economy and popular opinion, National Security Adviser John Bolton said on Wednesday. Saudi Arabia told OPEC it cut supply in July, rather than increasing output as expected.

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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