The combination of crumbling Venezuelan oil production and the aggressive USA efforts to curtail Iranian exports is going to tighten the market.
U.S. West Texas Intermediate (WTI) crude futures were at $68.70 per barrel at 0847 GMT, down 26 cents from their last settlement.
Saudi Arabia's production increased by 230,000 barrels a day in July to 10.65 million barrels per day.
Low U.S. stockpiles were still providing a floor for prices, with overall U.S. crude inventories below the five-year average of around 420 million barrels. US crude ended the week down 0.4 percent, while Brent has fallen 1.5 percent in the week so far. Additionally, he said, USA monthly figures for production fell in May, suggesting output may be curbed later in the year. The return of sanctions on Iran was one of the reasons why the experts raised again-for a tenth consecutive month-their oil price forecasts for WTI Crude and Brent Crude prices, which are now expected to average $67.32 a barrel and $72.87 a barrel this year, respectively.
Meanwhile, Opec's July output climbed as Saudi Arabia pumped near-record volumes and Russian Federation boosted production to levels not seen since it joined the cartel in a coordinated cut two years ago.
"Oil is holding up reasonably well".
The United States, China and India have previously urged oil producers to release more supply to prevent an oil deficit that could undermine global economic growth. Under constant pressure from US President Donald J. Trump to cool prices, Opec and its allies are fulfilling a pledge made in June to increase output to ease concerns over potential supply disruptions in countries such as Iran and Venezuela.
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Hedge funds and other money managers cut their bullish USA crude bets in the latest week, as oil prices were range-bound, pinned between concerns about tight supply due to sanctions and fears that trade disputes could curb demand.
Alongside Russia, OPEC kingpin Saudi Arabia and other members of the Middle-East dominated oil cartel agreed in late June to begin increasing production by up to 1 million barrels per day starting in August.
US President Donald Trump's decision to pull out of an global nuclear deal and reimpose sanctions on Iran has angered Tehran.
"It is unclear that the higher tariffs proposed by the Trump Administration will ever be imposed and if they are that they will have a major detrimental impact on oil demand", Flynn said.
"There are a lot of escalation points that could occur very quickly and that worries me", Jonathan Barratt, chief investment officer at Ayers Alliance in Sydney, said. "This could severely dent the competitiveness of US oil and derivatives in the Chinese market", said Abhishek Kumar, senior energy analyst at Interfax Energy.
The market's expectation was 2.8 million barrels of crude oil draw.