Oil prices were down on Friday as the market refocused on bearish longer term factors following a bounce in the previous session as U.S. crude inventories in a key hub fell to their lowest in almost four years.
A worker holds a nozzle to pump petrol into a vehicle at a fuel station in Mumbai, India, May 21, 2018.
Meanwhile, West Texas Intermediate crude prices went up by 12 cent, or 0.18 per cent, to United States dollars 67.78 a barrel while Brent crude edged up by 16 cent, or 0.22 per cent, to USD 72.55 a barrel on the New York Mercantile Exchange.
Crude palm oil prices went up by 0.27 per cent to Rs 590.50 per 10 kg in futures trade today as speculators widened their positions amid firm demand at the spot market.
USA stockpiles have been in the spotlight because they rose unexpectedly last week, stoking fears that the market is becoming oversupplied. They fell 1.6 percent in the previous session.
"Venezuela's ticking time bomb together with the return of Iran's oil industry to the sanctions era has all the makings for a major supply shock", Stephen Brennock, oil analyst at PVM Oil Associates, said in a research note published Friday.
Fears that Chinese demand could taper fuelled the pullback on Friday after state oil major Sinopec cut its purchases of USA crude.
Head of Commodity Strategy at Saxo Bank A/S in Copenhagen, Ole Sloth Hansen, said: "We are seeing continued negative sentiment, driven by worries over growth and demand".
China has said it plans to impose tariffs on liquefied natural gas, raising concerns that it could also impose tariffs on oil, said John Kilduff, partner at Again Capital Management in NY.
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Traders said prices rallied early when industry information provider Genscape reported that crude inventories at the Cushing, Oklahoma, delivery hub for US crude, dropped 1.1 million barrels since Friday, July 27.
The Commerce Department said on Friday the trade gap surged 7.3 percent to $46.3 billion.
Saudi Arabia's crude oil production in July was around 10.290 million barrels per day, two OPEC sources said on Friday.
The producer group on June 23 agreed with Russian Federation and nine other allies on a one million bpd output increase to head off any supply shortages emerging from U.S. sanctions on Iran and Venezuela's continued decline, among other market disruptions.
According to the Weekly Petroleum Status Report, U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve (SPR), increased by 3.8 million barrels last week.
USA crude inventories rose 3.8 million barrels last week, according to data from the Energy Information Administration.
USA drillers cut rigs for the second week in three, reducing the number of oil rigs by two to 859.
USA crude oil imports averaged 7.75 million barrels per day last week, maintaining the levels of the previous week.