Oil Prices Drop as U.S. Inventory Grows

Oil Prices Drop as U.S. Inventory Grows

Oil prices faltered in July, shedding value in crude's worst month in two years.

Oil slipped below $74 a barrel on Wednesday, pressured by an industry report that USA stockpiles of crude rose unexpectedly and by higher OPEC production, adding to indications of more ample supply.

Prices rose amid fears of supply...

Oil prices are likely to hold fairly steady this year and next as increased output from OPEC and the US meets growing demand led by Asia and helps to offset supply disruptions from Iran and elsewhere, a Reuters poll showed on Tuesday.

LONDON: OPEC oil output has risen this month to a 2018 high as Gulf members pumped more after a deal to ease supply curbs and Congo Republic joined the group, a Reuters survey found, although losses from Iran and Libya limited the increase.

Oil prices fell about 2 percent on Wednesday as a surprise increase in us crude stockpiles fed concerns about global oversupply, while investors anxious that trade tensions could hit energy demand.

Gasoline stocks USOILG=ECI fell 2.5 million barrels, compared with analysts' expectations in a Reuters poll for a 1.3 million-barrel drop.

September Brent crude futures fell 25 cents, or 0.3 percent, to $74.72 a barrel by 0654 GMT after rising almost 1 percent on Monday.

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Money managers boosted their net-long position - the difference between bets on rising prices and wagers on a decline - in Brent crude by 4.1 per cent after cutting them the most since 2016 a week earlier.

Oil prices started the week with slight gains due to U.S. President Donald Trump's statements of threatening Iran with potential intervention.

At 408.7 million barrels, the EIA said, crude oil inventories were below the five-year seasonal average.

Futures in NY fell as much as 0.8 percent after a 2 percent decline Tuesday. This will also mean higher prices. Crude oil prices in the second quarter benefited from the sustained production cuts by Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC allies and the continued uncertainty with respect to Iran's oil operations.

Saudi Arabia last week said it was suspending oil shipments through the Red Sea's Bab al-Mandeb strait, one of the world's most important sea routes for crude oil, after Yemen's Iran-aligned Houthis attacked two ships in the waterway.

Kuwait confirmed on Wednesday it had increased production in July.

"A trade war will slow down economic growth and demand for oil but also eventually spill over into other asset classes, mostly equities, that can have an impact on oil prices through a negative market sentiment", Jette Jørgensen of Global Risk Management Ltd said. "Even though trade war worries were eased between the US and European Union this week, they still loom large with China, weighing on prices".

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