In the previous week, total US inventories rose 3.8 million barrels, while supplies at Cushing fell 1.3 million barrels. United States crude futures slumped last month by the most in two years, and traded just below $68 a barrel on Wednesday on the New York Mercantile Exchange.
US crude oil refinery inputs averaged 17.48 million barrels per day during last week, which was 195,000 barrels per day higher than the previous week's average. That's an average monthly intake of 2.35 million barrels of US crude.
The speculator group cut its combined futures and options position in NY and London by 5,287 contracts to 407,001 during the week ending July 31, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. The price for Brent crude oil, the global benchmark, was up 0.23 percent to $73.62 per barrel as of 9:15 a.m. EDT. "Yesterday you had a strong rebound supported by Cushing but there's not a lot else that is driving prices higher so we are seeing a bit of a correction", Olivier Jakob at Petromatrix consultancy said.
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.
The weekly estimates for May all point to more than 10.7 million bpd of crude oil production, but the more accurate-albeit lagged-data, based on survey of producers, shows that US oil output had trailed projections by around 300,000 bpd. But a complete halt to Iranian supplies looks unlikely with Bloomberg reporting on Friday that China, Iran's biggest customer, has rejected a USA request to cut imports from the oil cartel Opec member.
Trump has turned up pressure on China for trade concessions by proposing a higher 25 percent tariff on $200 billion of Chinese imports and China has said it will retaliate.
USA crude oil production is growing, but at a slower pace than predicted.
The price jump earlier this summer had come about in large part because of President Donald Trump 's decision to pull the US out of an global agreement to curb Iran's nuclear program.
"There are a lot of escalation points that could occur very quickly and that worries me", Jonathan Barratt, chief investment officer at Ayers Alliance in Sydney, said.
"It is nearly certain that China will impose additional duties on oil and refined products imported from the USA if the Trump administration implements additional tariffs on the next tranche of Chinese goods".
Oil prices could soon rally above $90 a barrel amid growing concerns over the prospect of steep declines in Iranian crude, according to industry analysts.