USA crude back over $70/bbl.
The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Wednesday morning, showing that U.S. commercial crude inventories increased by 3.8 million barrels last week, maintaining a total U.S. commercial crude inventory of 408.7 million barrels.
Signs that a supply disruption in the Bab al-Mandeb Strait in the Red Sea could be resolved also weighed on prices.
Although trade tensions between the U.S. and China pushed oil lower for much of this month, Barclays Plc warned of " significant upside risk" for prices in the fourth quarter as sanctions begin to bite Iranian exports.
On Monday, WTI prices reached 69.31 dollars a barrel on the New York Mercantile Exchange but it took a steep dive due to those concerns and settled at 67.89 dollars.
"Opec could bring back one million barrels a day, but any barrels brought back by Saudi, Russia, Kuwait, those might just offset barrels lost from Iranian sanctions", said Noah Barrett, an energy research analyst at Janus Henderson Investors.
US West Texas Intermediate (WTI) crude futures were up 22 cents, or 0.3 per cent, at $68.91 a barrel by 0058 GMT.
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United States crude stocks fell in the week of July 20th by 6.1mn barrels, while U.S. drillers added another three rigs to their oil drilling inventory. WTI fell 1.3 per cent on Friday, marking a fourth week of declines.
Yesterday, the commodity fell sharply after private data from the American Petroleum Institute showed a larger-than-expected build in U.S. crude stocks. Crude oil prices in the second quarter benefited from the sustained production cuts by Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC allies and the continued uncertainty with respect to Iran's oil operations.
A survey of 44 economists and analysts forecast Brent crude to average $72.87 a barrel in 2018, 29 cents higher than the $72.58 projected in the previous month's poll and above the $71.68 average so far this year.
Oil bulls are venturing back into the market as global conflict sparks concern that supply disruptions will leave buyers scrambling for barrels. Last week, Saudi Arabia suspended oil shipments through the strait after the Houthi group attacked Saudi oil tankers.
Production also slipped in Venezuela, where the oil industry is starved of funds because of economic crisis, and in Angola due to lower exports in July against a backdrop of natural decline at oilfields.
The market largely overlooked reports that US and China may restart negotiations to defuse the trade war between the two countries.
Concern over slowing economic growth because of a trade dispute between the United States and China are also putting downward pressure on the market.