Sanctions on Iran cloud supply outlook

Oil Prices Gain on Falling U.S. Inventories

Oil price leaps to $74 per barrel as US inventory drops

American crude oil stockpiles are predicted to go down by 2 million barrels ahead of the Energy Information Administration's weekly report that is due to be published on Wednesday. The actual report was a build rather than a draw due to higher than normal crude oil inputs to the refineries.

Benchmark Brent crude oil LCOc1 was down 30 cents a barrel at $74.48 by 0825 GMT.

USA crude rose more than 4 percent on the week, after seven consecutive declines, and Brent rose 5.3 percent after three weeks of falling prices.

India's crude oil imports from Iran fell in the first half of August, according to a report by Edelweiss Securities Ltd, citing data from FGE, a global oil and gas consultancy.

LONDON-Oil prices ticked up Wednesday morning, boosted by signs of declining USA petroleum inventories.

OPEC stated: "The price of OPEC basket of 15 crudes stood at $70.27 a barrel on Friday, compared with $69.47 the previous day, according to OPEC Secretariat calculations".

Negative pressure on the price of oil could emerge from decisions by the office of the U.S. Trade Representative, which has scheduled hearings this week on additional trade pressure on China.

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China's shipowners are shunning Iran's oil, while the OPEC producer is using its own tankers to supply top customers as impending USA sanctions threaten to disrupt global crude trade.

Moreover, oil-tanker owners are seen staying away from hauling Iranian supplies because of the risk of being cut off from the booming business of transporting crude pumped from shale fields in Texas or wells in the Gulf of Mexico.

"The Iran issue continues to occupy traders' minds", said Greg McKenna, chief market strategist at futures brokerage AxiTrader.

On the supply side, the decision by the Organisation of the Petroleum Exporting Countries (Opec) to increase output again to compensate for production losses in Iran and Venezuela is already taking effect, with the group adding more than 300,000 barrels in the last month.

Opec has started to boost supplies following a deal with Russian Federation and other allies in June, although producers have been cautious so far.

Worldwide markets weakened as the intensifying trade spat between the United States and China was seen as a drag on economic growth.

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