Sources at South Korean refining companies and a Chinese trading firm indicated that light sweet and medium sour United States crude suppliers may have to step up efforts to remain competitive in the Asian market, especially due to China's continued threats to levy a 25% tariff on American energy products.
Trade tensions threaten to undermine global economic momentum and crimp the demand for oil.
Washington had previously said countries must halt all imports of Iranian oil from November 4 or face USA financial measures, with no exemptions.
NEW YORK, July 10 (Reuters) - Oil rose on Tuesday, supported by a larger-than expected USA stock draw and supply concerns in Norway and Libya, though gains were tempered by the United States' indication that it would consider requests for waivers from Iranian oil sanctions.
An announcement by Libya's National Oil Corp that four oil export terminals were reopening, ending a standoff that had shut down most of Libya's oil output, was a key catalyst for the price fall on Wednesday, analysts said.
President Trump has been pressuring the Organization of the Petroleum Exporting Countries, or OPEC, to increase production to cool off oil prices, which recently hit the highest levels in over three years.
Moving forward, we have to consider several factors.More news: Bomb kills at least 128 at Pakistan election rally
Secondly, the recent rally was being supported partly from a drop in Libyan output.
"In 2019, EIA forecasts that the United States will average almost 12 million barrels of crude oil production per day", said Linda Capuano, Administrator of the EIA. If Libyan production can get back to its high then this will take care of some of the spare capacity concerns.
Finally, we have to continue to expect production from Saudi Arabia, Russia and the U.S.to rise. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger USA crude oil bearish contrarian trading bias.
He said that with growing concerns of supply disruptions boosting investor attraction towards the commodity, prices were likely to remain buoyed in the near-term.
According to the September WTI chart, the trend is down according to the daily chart, putting the market in a position to test $67.99 to $66.81.
The Taiwanese end-user could have paid premiums of around $1/b to Platts Dated Brent on a delivered basis, market sources said, adding that light sweet U.S. crude cargoes offered into Asia recently have been quoted at attractive price levels.