Oil prices rise amidst U.S. sanctions against Iran

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Oil prices rise amidst U.S. sanctions against Iran

US West Texas Intermediate (WTI) crude futures were up 1 cent at.02 barrel.

Prices were driven lower on Friday by ongoing trade concerns between the USA and China.

Oil futures gained on Monday after OPEC sources said Saudi crude production unexpectedly fell in July, raising concerns about global oil supplies as the United States prepares to reinstate sanctions against major exporter Iran.

Goldman Sachs insists we are heading for a "very, very tight oil market".

Futures in NY were little changed after a 0.8-percent increase on Monday.

Brent crude oil futures were up by 33 cents from their previous close at $73.54 a barrel by 1401 GMT, while USA futures gained 57 cents to trade at $69.06 barrel. The contract surged 3.6 per cent on Tuesday after rising as much as their daily limit to a record.

Syncrude Canada's nameplate capacity stands for roughly 10 percent of the Canadian crude oil supply.

China received 14.65 million barrels of USA crude in June, a historical high, but volumes have more than halved to just 6.9 million barrels in July, according to Platts' vessel tracker cFlow.

India has booked a total of 9.94 million barrels of crude, about 319,000 barrels per day (bpd), to arrive from the United States this month, according to vessel-tracking and port data compiled by Thomson Reuters Oil Research and Forecasts.

Less than a year after first oil from the U.S. was imported into India, state-owned Indian Oil Corp (IOC) has signed up to buy crude oil from the USA through a term-tender deal, a senior company official said. Friday's Baker Hughes crude oil rig count was down slightly from last week, reducing the number of oil rig counts from 861 to 859.

"Weaker Chinese import figures are putting pressure on prices ..."

After last week the EIA reported an inventory build of 3.8 million barrels, analysts had forecast a draw of 1.2 million barrels this week.

As plentiful volumes of USA crude might be looking for new homes when China imposes a 25% import tariff on American crude, a large number of the displaced barrels could make its way to India, analysts said.

EIA also reported on Wednesday that USA oil production declined to 10.9 million barrels per day during the week ending July 27, dropping from its record high level of 11 million barrels per day. This will hurt the Iranian economy but it shouldn't have a huge effect on the oil market because it won't derail production or exports.

"We view that it is very unlikely that the USA administration will be successful in reducing Iranian exports to zero", analysts at MUFG said in a note on Wednesday.

FGE added, however, that USA would be only filling a part of the void created by a fall in imports from Iran. The sources declined to be identified as they are not authorised to speak to the media.

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