Oil prices rise as looming Norway strike adds to disruptions

Oil prices rise as looming Norway strike adds to disruptions

Oil prices rise as looming Norway strike adds to disruptions

This raised the possibility that China would retaliate by slapping a tariff on imports of USA crude oil.

Brent crude LCOc1 fell $5.46, or 6.9 percent, to settle at $73.40 a barrel.

"The scope of today's sell-off is unequivocally a speculative washout", said Saucer.

Lower oil prices are particularly important to US consumers in the summer months when driving reaches its heaviest.

OPEC, Russia and several other producers recently agreed to increase output by 1 million barrels in order to ease oil prices away from 3½-year highs. A stronger dollar can weaken dollar-denominated commodities, like crude.

The IEA report showed further signs that prices are taking a toll, with global demand growth slowing in the second quarter to just 900,000 barrels a day.

That suggests Wednesday's tumble on news that Libya is reopening four oil export terminals was overdone.

Libyan oil production fell to 527,000 barrels per day (bpd) from a high of 1.28 million bpd in February following the port closures, the NOC said on Monday.

"Libyan relief changes the conversation about spare capacity", said John Kilduff, a partner at Again Capital Management.

"This will become an even bigger issue as rising production from Middle East Gulf countries and Russian Federation, welcome though it is, comes at the expense of the world's spare capacity cushion, which might be stretched to the limit".

The rally received an extra boost from the International Energy Agency (IEA), which said the world's oil supply cushion "might be stretched to the limit" due to production losses.

De factor OPEC leader Saudi Arabia ramped up its crude production in June to the highest level since the end of 2016, making good on its recent pledge to tame oil prices.

Washington had previously said countries must halt all imports of Iranian oil from November 4 or face US financial restrictions, with no exemptions.

USA crude oil stocks fell by almost 13 million barrels last week, the most in almost two years, dropping overall crude stocks to their lowest point since February 2015, the Energy Information Administration said on Wednesday.

Saudi Arabia might have to draw harder than ever before on its spare production capacity as a spiraling economic crisis in Venezuela, renewed USA sanctions on Iran and disruptions in Libya strain global markets, the agency predicted.

"In spite of the extraordinary draw in crude oil inventories, the market is under pressure after refiners produced a record amount of gasoline this week and in conjunction with a greater than expected build in distillate inventories", said Andrew Lipow, president at Lipow Oil Associates in Houston.

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