Oil Slips, Weighed by Saudi Output, Trade Spat

Posted by Joseph Keefe
Friday, July 6, 2018
U.S. crude inventories rise unexpectedly; U.S. implements tariffs on Chinese goods on Friday.
Oil slipped below $77 a barrel on Friday, under pressure from higher Saudi production and trade tensions between the United States and China, despite support from oil supply disruptions.
Top exporter Saudi Arabia told OPEC it raised oil output by almost 500,000 barrels per day last month, OPEC sources said, a sign Riyadh wants to make up for shortages elsewhere and dampen prices.
Brent crude, the global benchmark, was down 76 cents at $76.63 a barrel by 1148 GMT. U.S. crude slipped 60 cents to $72.34.
"On the bearish side both Saudi Arabia and Russia are living up to their promise to increase output," said Tamas Varga of oil broker PVM. "Looming U.S. sanctions on Iran, however, are causing serious concerns amongst market players."
U.S. tariffs on $34 billion in Chinese imports took effect as a deadline passed on Friday and Beijing has vowed to respond immediately in kind, setting the two world's biggest economies on a path towards a full-blown trade conflict.
"The U.S.-China trade dispute is set to intensify as neither side is prepared to back down," said Abhishek Kumar, senior energy analyst at Interfax Energy.
A U.S. government report also weighed on prices this week, showing crude stockpiles rose by 1.3 million barrels, while analysts had forecast a decline.
The potential trade war between the United States and China comes amid a tight oil market.
Oil output cuts by the Organization of Petroleum Exporting Countries and allies including Russia since January 2017 have reduced a glut of crude.
Involuntary drops in supply in Venezuela, Angola and Libya have made the cutbacks even bigger, although OPEC has now started to ease those curbs with Saudi Arabia pumping more.
Even so, renewed U.S. sanctions on Iran against its oil exports look set to tighten supply further.

South Korea, a major buyer of Iranian oil, will not lift any in July for the first time since August 2012, three sources familiar with the matter said on Friday.

By Alex Lawler

Categories: Contracts Energy Finance Fuels & Lubes Government Update Logistics Offshore Energy Shale Oil & Gas Tankers

Related Stories

Vietsovpetro Brings BK-24 Oil Platform Online Two Months Early

Propane’s Economic Edge for Ports During Trade Uncertainty

Ventura Offshore’s Semi-Sub Rig to Keep Drilling for Eni in Asia

SBM Offshore, SLB to Optimize FPSO Performance Using AI

Aesen, DOC JV Targets Subsea Cable Logistics

Seatrium Secures ABS Backing for Deepwater FPSO Design

Brownfield Output Decline Accelerates, says IEA

SPE Offshore Europe 2025 set to drive transformational change for the energy sector

Dutch Contractor Completes Malaysia’s Largest 'Rig-to-Reef' Decom Project

China Rolls Out 17MW Floating Wind Turbine Prototype

Current News

Pharos Energy Kicks Off Drilling Campaign Offshore Vietnam

Viridien to Shed More Light on Malaysia’s Offshore Oil and Gas Potential

US Pressure on India Could Propel Russia's Shadow Oil Exports

Energy Drilling’s EDrill-2 Rig Starts Ops for PTTEP in Gulf of Thailand

RINA Wins FEED Contract for Petronas’ Flagship CCS Project in Malaysia

ABL Secures Rig Moving Assignment with India's ONGC

Pakistan, Türkiye Deepen Oil and Gas Ties with Offshore Indus-C Block Deal

Eni-Petronas Gas Joint Venture Up for Launch in 2026

Vietsovpetro Brings BK-24 Oil Platform Online Two Months Early

Propane’s Economic Edge for Ports During Trade Uncertainty

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com