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

MODEC Ramps Up Hammerhead FPSO Work After ExxonMobil's Go-Ahead

MDL Secures Cable Laying Job in Asia Pacific

Hanwha Ocean Enlists ABB for Singapore’s First Floating LNG Terminal

POSH Set to Tow Nguya FLNG from China to Eni’s Congo Field

Floating Offshore Wind Test Center Planned for Japan

PXGEO Nets First Seismic Survey off Malaysia

Saipem Marks First Steel Cut for Tangguh UCC Project at Karimun Yard

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

Fugro Expands Geotechnical Testing Capabilities in Indonesia

Fugro Lands Deepwater Gas Field Job in Southeast Asia

Current News

MODEC Ramps Up Hammerhead FPSO Work After ExxonMobil's Go-Ahead

Aesen, DOC JV Targets Subsea Cable Logistics

Timor Gap Boosts Stake in Finder Energy’s Timor-Leste Oil Fields

SBM Offshore Starts Construction of FSO for Trion Oil Field off Mexico

Russia Targets 2028 for Sakhalin-3 Gas Project Start Up

Seatrium Secures ABS Backing for Deepwater FPSO Design

MDL Secures Cable Laying Job in Asia Pacific

Hibiscus Petroleum Starts Drilling at Teal West Field off UK

Yinson Production Nets DNV Approval for New FPSO Hull Design

Hanwha Ocean's Tidal Action Drillship Starts Maiden Job with Petrobras

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