Oil prices tanked earlier this week when the USA government reported that US inventories rose 3.8 million barrels in the prior week, against expectations, but rose on Thursday on expectations the stockpile would soon decline again. USA crude futures slumped last month by the most in two years, and traded just below $68 a barrel yesterday on the New York Mercantile Exchange.
USA 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.
The increase in American oil shipments follows the world's fifth-largest oil importer halting Iran crude loadings from July, ahead of USA sanctions, while its refiners are also seeking cheaper alternatives to Iraq's Basra crude.
Futures fell for the third day in NY, losing as much as 1.1 per cent to hit their lowest level since June 22, but US government's data showed a surprise gain in nationwide stockpiles on Wednesday.
"South Korean refiners are turning to USA crude because of Iran sanctions".
Brent crude futures were last down 33 cents at $72.06 a barrel by 12:00pm GMT, while U.S. crude futures fell 55 cents to $67.11.
Output by top exporter Saudi Arabia has also risen recently, to around 11 million bpd, and US production C-OUT-T-EIA is around that level as well.
Official data from Russian Federation on Thursday showed that the country's oil output rose by 150,000 barrels per day (bpd) in July from June to 11.21 million bpd.
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"Oil is holding up reasonably well ..."
Crude prices remained supported by the prospect of an Iranian supply squeeze following the imposition of USA oil sanctions, with yesterday's rally stymied by short-term bearish supply factors that continue to weigh on prices.
"At the moment, there is a mismatch in timing, where there is increasing OPEC supply and yet we're not seeing a significant reduction in Iranian supply", Patterson said.
USA crude oil imports averaged 7.75 million barrels per day last week, maintaining the levels of the previous week.
Oil last month posted the worst loss in two years on concern a trade war between the United States and China could curb economic growth and limit energy demand.
U.S. President Donald Trump has sought to ratchet up pressure on China for trade concessions by proposing a higher 25 percent tariff on $200 billion worth of Chinese imports.
There are a lot of escalation points that could occur very quickly and that worries me, Barratt said.
Crude oil futures remained relatively stable in European morning trading, following yesterday's rally of more than $1/b, as the market held up against short-term bearish factors that continue to weigh on sentiment.