Oil prices fall amid surprise growth in U.S. crude stocks

Tale of Two Oil Markets Brent Bulls Split From US Optimists

US oil futures surged almost 2 percent on Wednesday as they were bolstered by a fifth weekly crude inventory drawdown and strong domestic gasoline demand amid ongoing global supply concerns over USA sanctions on Iran that come into force in November.

The International Energy Agency, the oil watchdog for industrialized countries, warned earlier this month that Brent prices could break out above $80 a barrel unless other producers act to offset deepening supply losses in Iran and Venezuela.

A group of oil-market analysts predicted in April that sanctions wouldn't cut exports by more than 800,000 barrels a day.

In the last two weeks, Al-Falih has met his counterparts from Russian Federation and the U.S., Alexander Novak and Rick Perry, to discuss the oil market and the impact of U.S. sanctions on Iranian petroleum exports. Iran's share of OPEC revenues increased to 10% in 2017 to its highest level since 1999, recovering from declines from 2012 through 2015 that resulted from sanctions targeting Iran's oil exports.

U.S. West Texas Intermediate (WTI) crude futures were up 20 cents, or 0.29 percent, at $70.05 a barrel, having climbed 1.4 percent the day before. Data from the InterContinental Exchange shows open interest in calls that give the owner the right to buy Brent futures at $80 and $85 by next week grew by almost 45 per cent on Monday and Tuesday to an equivalent of 54 million barrels of oil.

Stockpiles of distillate fuels, which include diesel and heating oil, rose by 1.5 million barrels, the API data showed, compared with expectations for a 651,000-barrel gain.

More news: NEWS8 hours ago Russia Blames Israel For Shooting Down Plane

Official inventory data from the U.S. Energy Information Administration will be released later on Wednesday.

On Tuesday, the global oil benchmark rose 1.3 percent on a media report that Saudi Arabia, the world's largest oil exporter, was comfortable with prices above $80, indicating the producer would not try to increase output to drive prices lower.

There are signs, however, that Saudi Arabian exports did not increase in July.

"The declaration of cooperation has come to stay", he said.

Russia's Defense Ministry said a Russian military plane was shot down by Syrian anti-aircraft systems, but accused Israel of indirectly causing the incident, saying Israeli jets nearby had put the Russian plane in the path of danger.

Elsewhere, the latest escalation in the tit-for-tat trade war between the United States and China stoked worries over global economic growth and demand for oil.

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