The decline in USA inventories was partially due to a fall in stocks at the Cushing, Oklahoma delivery hub for US crude futures, which dropped 2.1 million barrels.
Economists at the Organization of Petroleum Exporting Countries said Wednesday the global economy slows from an expected rate of 3.8 percent for gross domestic product in 2018 to 3.6 percent next year, but downplayed the risk for a trade war.
Oil's price fall was aided by news Libya-based National Oil Corp. This potentially adds to disruptions in other oil producers amid tensions in the Middle East.
Supply to the USA market has also been squeezed by the loss of some Canadian oil production.
A spokesperson for the Chinese Foreign Ministry responded to a U.S. list of tariffs on another $200 billion in goods by saying U.S. President Donald Trump was a bully on trade. Such a tariff would make American crude oil uncompetitive in China, and USA oil sellers will have to find alternative buyers for their crude to replace the volumes they are now selling to their second-largest oil customer after Canada.
Money managers raised their bullish bets on US crude in the week to July 3, the US Commodity Futures Trading Commission said on Monday.
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USA light crude futures were up 17 cents, or 0.2 percent, at $74.02.
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 United States crude cargoes offered into Asia recently have been quoted at attractive price levels. South Korea, meanwhile, has cut shipments from Iran by 30 per cent in the period to 81,000 barrels a day, while Taiwan has boosted purchases to 11,000 barrels daily this year from zero three years ago. The prospect of lower demand for OPEC crude would enable the group to deal with upside surprises, the report said. Is it big buyers of Iranian crude? The global benchmark traded at a $6.07 premium to WTI for the same month.
Brent crude (LCOc1) fell $4.10, or 5.2 percent, to $74.76 a barrel by 1:40 p.m. EDT (1740 GMT). They earlier hit an intra-day high of $79.29.
"You've got USA competition coming left, right, center and landing cheaper".
Prospects of USA sanctions on crude exports from Iran, the world's fifth-biggest oil producer, has helped push oil prices up in recent weeks, with both crude contracts trading near 3-1/2-year highs until Wednesday.
In Canada, an outage at the 360,000-barrel per day (bpd) Syncrude oil sands facility reduced flows into Cushing, Oklahoma, the delivery point for USA futures.
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