Oil prices mixed as oversupply fears mount

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In recent weeks, supply disruptions in Venezuela, Canada, and Libya, and the prospect of significantly lowered Iranian oil exports, have supported oil prices, while Saudi Arabia and Russian Federation boosting production and the U.S.

The expiring U.S. West Texas Intermediate (WTI) crude for August delivery settled up $1.00 at $70.46 a barrel, while the more liquid September contract rose 2 cents to $68.26 a barrel.

This is on top of increased production from Saudi Arabia, Russia and the United States, which set a record last month with 11 million barrels per day production.

Al-Aama said Saudi Arabia's policy is to work on satisfying customers' needs, but to do so while adhering to OPEC and non-OPEC supply agreements.

Trade tensions continued to weigh on the market, providing a ceiling for any gains, traders said.

More is likely to come to market before long, Rystad Energy said.

Saudi crude exports fell by about 500,000 barrels a day to 6.7 million in the first half of July compared with the same period in June, tanker tracking by Bloomberg shows.

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The most interesting things to watch was decline in U.S. net imports of petroleum products to just 1.670 mb/d, the lowest weekly total on record in at least three decades.

Goldman Sachs has been bullish on crude oil this year. Prices, which had strengthened on news of Saudi Arabia's planned export cuts, fell as the market's focus returned to potential oversupply as Saudi Arabia, Russia and other major producers continue to lift output. Saudi Arabia, the group's de facto leader and the biggest producer, said production this month will be slightly higher than in June, according to people familiar with the matter.

Iran, which is the third-largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC), now counts China, India, South Korea, Japan, and Turkey as its biggest importers, but not for long.

"That's the takeaway from Wood Mackenzie's latest long-term outlook for global oil supply", reports OilPrice.com, an industry site. Meanwhile, the Korean government is readying negotiation with the U.S.to get a waiver from the sanctions on Iranian crude oil imports.

U.S. crude oil inventories increased in the week ending July 13, the U.S. Energy Information Administration (EIA) said in a report on Wednesday. Holding production steady would mean shipping less crude than Saudi Arabia indicated after the Opec deal.

Amid numerous indicators that the crude market either is returning or could easily return to oversupply, trading on Thursday was mixed, with USA crude rising 1 percent on the strength of falling inventories at the Cushing, Oklahoma hub, and Brent dropping 1 percent due to major producers continuing to lift output.