Oil prices drop on oversupply concerns as OPEC output increased in July

Oil prices drop on oversupply concerns as OPEC output increased in July

Inventories at the delivery point for us crude futures have plunged after an outage at Syncrude's oil sands facility in northern Alberta, Canada, in June dented flows to the hub.

United States tariffs on another US$16 billion (€13.7 billion) of Chinese imports are to take effect on Wednesday, following levies on US$34 billion that took effect earlier this month against which China responded with tit-for-tat charges on USA agricultural goods.

USA stockpiles of crude oil are once again sending oil prices in another direction, with the American Petroleum Institute (API) showing that United States reserves of crude oil barrels once again rose by 5.6 million barrels in just a week, wiping out previous contractions in supply stocks and pushing oil prices back into recent lows, with WTI prices back into 68.40. West Texas Intermediate, the USA benchmark for the price of oil, was down 1.37 percent to $69.17 per barrel.

American crude stockpiles probably declined by 3 million barrels last week, according to the median estimate of analysts surveyed by Bloomberg, with all but one expecting a drop.

West Texas Intermediate crude for September delivery fell as much as 54 cents to $68.22 a barrel on the New York Mercantile Exchange, and traded at $68.28 at 3:57 p.m.in Tokyo.

Crude has declined about 6% this month, as simmering trade tensions between the US and China push prices lower at a time when American shale output continues to surge.

Crude oil prices are now moving lower.

Hamilton nabs pole position for Hungarian F1 GP amid heavy rain
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US crude futures were seen averaging $67.32 a barrel in 2018, compared with $66.79 forecast last month and an average of $66.16 until now.

Futures in NY fell as much as 0.8 percent after a 2 percent decline Tuesday.

The market held gains even after a Reuters survey showed the Organization of the Petroleum Exporting Countries increased production in July. The group has pledged to reduce the amount of oil output they are curtailing to offset the loss of Iranian supply as looming sanctions have already started to cut exports from OPEC's third-largest producer.

Prices remain buoyed by a tight supply outlook, with global inventories down from record highs in 2017 and USA inventories at three-year lows, said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.

Saudi Arabia, meanwhile, temporarily halted shipments via a key Red Sea shipping lane after it said two tankers were attacked by Yemen's Houthi militia.

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. The trade dispute between the nations - home to the world's two biggest economies - has weighed on oil markets because it threatens to slow global growth and cool demand for crude.

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