Oil dented by rising tide of supply

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Crude palm oil prices went up by 0.27 per cent to Rs 590.50 per 10 kg in futures trade today as speculators widened their positions amid firm demand at the spot market.

USA crude oil imports averaged 7.75 million barrels per day last week, maintaining the levels of the previous week.

Brent crude, the global benchmark, was up 0.2% at $73.61 a barrel on London's Intercontinental Exchange.

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

USA crude oil production is growing, but at a slower pace than predicted.

The West Texas Intermediate (WTI) for September delivery lost 0.47 US dollar to settle at 68.49 dollars a barrel on the New York Mercantile Exchange, while Brent crude for October delivery erased 0.24 dollar to close at 73.21 dollars a barrel on the London ICE Futures Exchange.

"Oil is holding up reasonably well".

U.S. crude inventories rose by 3.8 million barrels last week as exports declined, creating the largest increase in Gulf Coast stocks since March, the Energy Information Administration said.

"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.

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Saudi Arabia's output rose by 230,000 barrels a day in July to 10.65 million barrels per day.

Despite the decline, China "continues to hold the mantle as the leading Asian destination for US crude", said the firm's commodity research director, Matt Smith.

"A clear definition around the macros is what the market is looking for and until we get that, it is likely to be volatile in the range", said Jonathan Barratt, chief investment officer at Ayers Alliance in Sydney.

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.

Elsewhere, oil prices may be moving on growing concerns about US-Chinese trade policies.

USA crude oil exports averaged 1.31 million barrels per day last week, down by 1.37 million barrels per day from the previous week.

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. Senior Iranian officials have warned the country would not easily yield to a renewed US campaign to strangle Iran's vital oil exports.

The producer group on June 23 agreed with Russian Federation and nine other allies on a one million bpd output increase to head off any supply shortages emerging from U.S. sanctions on Iran and Venezuela's continued decline, among other market disruptions.

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