Russia's Novak: Higher oil production in July aimed at market stability

Here are the latest oil production numbers from the EIA. All data is in thousand barrels per day unless otherwise noted

Oil prices fell for a third day on Thursday, following a surprise increase in United States crude inventories that added to existing concern about the rapid rise in global crude supply.

However, low stocks were still providing a floor as even with last week's rise, overall US crude inventories are below the 5-year average of around 420 million barrels.

In the statement on Wednesday, a day ahead of monthly oil and gas output data publication, Novak said that Russian Federation was pumping on average 40,540 bpd less in July compared to October 2016, a cut-off month for the OPEC+ deal.

Concerns about demand from China also increased Friday as state oil major Sinopec cut its purchases of USA crude.

Crude oil futures for September ended down $1.10, or 1.6%, at $67.66 a barrel on the New York Mercantile Exchange.

Market participants await the next fundamental development to drive prices, which is likely to be news of who stopped buying Iranian barrels for August.

For oil prices, EIA expects Brent Crude spot prices to average $73 a barrel in the second half of 2018 and $69 per barrel in 2019, with WTI Crude averaging $6 a barrel lower than Brent prices in the second half of 2018 and $7 per barrel lower in 2019.

Crude futures pulled back on Friday, giving up gains from the previous session as trade concerns weighed on the market and fueled concerns about demand. The actual record was a build that surprised the market.

Saudi Arabia's production increased by 230,000 barrels a day in July to 10.65 million barrels per day.

"Tariffs look set to kick in as soon as September, meaning that any barrels arriving on Chinese shores will be hit with a 25% tariff - taking US crude from an approximately $4/Bbl discount vs. global benchmarks, to a premium of approximately $13.50/Bbl", he added.

Saudi Arabia, Russia, Kuwait and the United Arab Emirates have increased production to help to compensate for an anticipated shortfall in Iranian crude supplies once planned USA sanctions take effect later this year.

"Venezuela's ticking time bomb together with the return of Iran's oil industry to the sanctions era has all the makings for a major supply shock", Stephen Brennock, oil analyst at PVM Oil Associates, said in a research note published Friday.

The kingdom has been under acute pressure from President Donald Trump to open the taps as he chokes off exports from Saudi's political rival, Iran.

Gasoline stocks fell by 2.5 million barrels, compared with analysts' expectations in a Reuters poll for a 1.3 million-barrel drop.

Meanwhile, trade war concerns have resurfaced again on reports the Trump administration is planning to propose a 25% tariff on goods worth over $200 billion imported from China, instead of the original proposal for a 10% levy.

"Unipec saying they won't buy US crude and China saying they won't comply with Iran sanctions are bearish", Jakob from Petromatrix said.

The EIA also reported US crude exports posted the biggest decline on record last week, while USA crude production fell for the first time since February.

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