Oil steadies to trade higher after losses

Crude oil futures fall 0.78% on overseas cues

Oil Ticks Up to End a Volatile Week

Crude oil prices turned sharply lower ahead of the start of trading on Wednesday in NY after a surprise build in crude oil inventories in the United States.

Last month, Brent fell more than 6 percent and USA crude slumped about 7 percent, the biggest monthly declines for both benchmarks since July 2016.

Brent for October settlement rose 44 cents to $72.83 a barrel on the London-based ICE Futures Europe exchange.

Crude oil production from the Organisation of Petroleum Exporting Countries increased last month as Saudi Arabia pumped near-record volumes to make good on a pledge to consumers that demand would be met.

Analysts said widening of positions by participants amid pick up in spot demand against tight stocks position on restricted supplies from overseas markets mainly kept crude palm oil prices higher at futures trade.

In the previous week, total USA inventories rose 3.8 million barrels, while supplies at Cushing fell 1.3 million barrels.

Traders said prices rallied early when industry information provider Genscape reported that crude inventories at the Cushing, Oklahoma, delivery hub for US crude, dropped 1.1 million barrels since Friday, July 27.

"There's an expectation that the build from this week will be gone next week", said Phil Flynn, an analyst at Price Futures Group in Chicago.

U.S. West Texas Intermediate (WTI) crude futures fell $1.10 to settle at $67.66 a barrel, a 1.6 percent loss.

The Organization of the Petroleum Exporting Countries and partners including Russian Federation had agreed in late 2016 to cut output by 1.8 million barrels per day to rebalance supply and demand.

"The increase in production is aimed at maintaining stability of the (global) oil market within the framework of joint actions of OPEC and non-OPEC countries", Novak said. "A lot of this is the risk premium priced in for Iran and when do we start seeing an impact on supply there", Patterson said.

"Unipec saying they won't buy USA crude and China saying they won't comply with Iran sanctions are bearish", Jakob from Petromatrix said. OPEC has responded with boosting supply, but we are yet to see how much Iranian supply would be choked off, Croft said, adding that "it's going to be very significant".

The kingdom has been under acute pressure from President Donald Trump to open the taps as he chokes off exports from Saudi's political rival, Iran.

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 USA crude due to potential import tariffs. The market expected 1.3 million barrels of gasoline draw.

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