LONDON-Oil prices fell Wednesday morning following news of an unexpected rise in USA crude stockpiles.
However, the oil prices felt pressures due to the expectations of new supply from OPEC and slowing down of energy demand resulting from trade conflicts, between the United States and China as well as other countries.
OPEC and allies agreed last month to boost supply as U.S. President Donald Trump urged producers to offset losses caused by new U.S. sanctions on Iran and to dampen prices, which this year hit $80 a barrel for the first time since 2014.
USA crude futures CLc1 were down 44 cents, or 0.6 percent, at $68.32 a barrel, having dropped almost 2 percent on Tuesday.
Analysts polled by IG Group had expected a slight inventory decline of 200,000 barrels, after the previous week's major, 6.1-million-barrel draw reported by the EIA.
The price of Brent crude was actually up 76 cents at $75.52 per barrel, while the US West Texas Intermediate (WTI) crude rose by $1.51 to settle at $70.21 per barrel.More news: Konta keeps cruising to reach San Jose quarterfinals
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Crude has declined about 6% this month, as simmering trade tensions between the USA and China push prices lower at a time when American shale output continues to surge. "While we have some bearish factors, including rising USA oil production, a trade war between the USA and China isn't drastically escalating, and that sense of relief is supporting prices".
Futures in NY fell as much as 0.8 percent after a 2 percent decline Tuesday.
That day, Treasury Secretary Steve Mnuchin eased the market's concerns about oversupply, saying the administration would consider allowing some oil buyers to reduce their purchases from Iran more gradually.
Alhajji said, "Unlike the past, USA weekly crude oil inventories have become extremely sensitive to U.S.net imports, making short term oil prices more volatile". OPEC, plus Russian Federation and other allies, decided in June to ease supply cuts in place since 2017.
Production also slipped in Venezuela, where the oil industry is starved of funds because of economic crisis, and in Angola due to lower exports in July against a backdrop of natural decline at oilfields. China's independent refiners were once the toast of the oil town, courted by everyone from OPEC producer Saudi Arabia to energy giant BP Plc and top independent trader Vitol Group.
"The market is facing different questions - Is global demand slowing due to weakening worldwide economic growth, will US production keep up its incredible pace, will output in Venezuela keep plummeting, what will USA sanctions do to Iranian production, and is OPEC really willing to raise output up to 1 mbpd!"
Last month, China and the United States slapped tariffs on $34 billion of each other's goods, and another round of USA tariffs on $16 billion in Chinese goods is expected in August.