Crude oil futures up at Rs 4,615 per barrel

Crude Oil

Crude Oil

Elsewhere, conflict is flaring up in Libya's oil crescent and disrupting output, and President Trump's promise to reimpose sanctions on Iran threatens their oil sales on the market. However, OPEC reduced more than what was required.

Oil production was flat at 10.9 million barrels per day last week, according to the Energy Information Administration.

Oil fell on Monday as investors prepared for an extra 1 million barrels per day (bpd) of oil to hit markets after OPEC agreed to raise production and as us equity markets slipped on trade war fears.

The record increase in global crude oil prices last month was feared to drive up demand and throw prices and supply in disequilibrium.

"Production in Venezuela and Iran should go down during the second half of this year".

Oil prices surged higher Wednesday as USA crude output remained unchanged for another week, while stockpiles plummeted. Americans still care about OPEC because they still control enough of market production to influence prices. US West Texas Intermediate (WTI) crude futures were at $70.79 a barrel, up 26 cents, or 0.3 per cent.

Last Friday, OPEC and other major non-OPEC producers tried to alleviate supply concerns over lost output from Venezuela and Iran by raising production.

Despite widespread global opposition to the US stance on Iran, analysts expect a significant reduction in exports from OPEC's third biggest producer, perhaps in excess of 1 million bpd.

OPEC and Russian Federation will now increase production by a total of around 1 million bpd over the rest of this year, which "should ensure ample supply and help to pull prices down", Pugh said.

"We're going to isolate streams of Iranian funding and looking to highlight the totality of Iran's malign behavior across the region", the official, speaking on condition of anonymity, told reporters.

This is a significant rise from 10.03 million bpd in May. By the end of next year, the buffer of spare capacity could diminish to the lowest in three years, the agency predicts.

Matt Smith, director of commodities research at ClipperData, agreed: "If we are going to see more Iranian barrels coming off the market, that is likely to be bullish for USA exports". Banks on Wall Street and elsewhere said they continue to see prices climbing because of the dwindling cushion. Even the recent deal to increase OPEC output merely returns production levels to the agreed upon targets from 2016.

Brent futures traded at US$76.67 a barrel in London at 9.19am local time on Tuesday. During the meeting, it was chose to boost oil production, however, the volume was not specified. That would mean a roughly 1 million bpd increase in output.

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