Oil holds at seven-week high on gulf storm, United States stockpiles draw

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Oil prices rose on Friday as United States oil producers in the Gulf of Mexico cut more than half their output in the face of a tropical storm and as tensions continued in West Asia.

USA oil producers on Wednesday cut almost a third of their output in the Gulf of Mexico ahead of what could be one of the first major storms of the Atlantic hurricane season.

Investors also eyed tensions in the Middle East. A fourth weekly draw in US crude stockpiles and signs that the Federal Reserve is prepared to cut interest rates also supported prices.

USA oil futures for August delivery finished 4.5 percent higher at 60.43 dollars a barrel, notching a seven-week high, according to Refinitiv.

US West Texas Intermediate crude futures were up 31 cents, at US$60.74 a barrel, having earlier touched their highest since May 23 at US$60.94. U.S. President Donald Trump vowed Wednesday to impose extra sanctions on Iran and accused it of violating the nuclear accord that he withdrew from closing year.

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Opec gave its first 2020 forecasts in a monthly report Thursday, saying the world would need 29.27 million barrels per day (Mmbpd) of crude from its 14 members next year, down 1.34 Mmbpd from this year.

"The break above US$60 is likely to attract some additional short-term momentum, but if the storm passes in the Gulf of Mexico we could see that fade away as the focus returns to demand worries", said Ole Sloth Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen.

According to the report, the higher non-OPEC production forecast is based to the debottlenecking of oil infrastructure in North America and new project ramp ups in Brazil, Norway and Australia.

Brent crude futures rebounded from early losses and were at $67.41 a barrel. The worldwide benchmark indecent traded at a US$6.47 premium to WTI for the identical month. Royal Dutch Shell Plc has also evacuated non-essential personnel at seven platforms and BP also began removing offshore personnel.

US crude stocks fell 9.5 million barrels in the week to July 5, shrinking more than triple the 3.1 million-barrel draw analysts had expected as refineries ramped up output, the Energy Information Administration (EIA) said. A day after Iran warned Britain would face "consequences" over the seizure of an Iranian oil tanker, three Iranian vessels tried to block passage of a British ship run by BP through the Strait of Hormuz, the British government said. Analysts at IHS Markit had expected a weekly drop of 2.1 million barrels.

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