Oil rises after OPEC sources say Saudi crude output fell

Crude oil posted its worst monthly loss in two years in July

Oil prices dipped on Wednesday after China reported relatively weak import data, although the market remained well supported by falling US crude inventories and the introduction of sanctions against Iran.

Brent futures rose 90 cents, or more than 1 percent, to $74.65 a barrel by 1:38 p.m. EDT (1738 GMT), after hitting a session high of $74.90.

Meanwhile, U.S. sanctions on Iran would take effect at 12:01 AM ET on Tuesday, following President Donald Trump signing an executive order to reimpose sanctions on Iran's energy sector.

India has booked a total of 9.94 million barrels of crude, about 319,000 barrels per day (bpd), to arrive from the United States this month, according to vessel-tracking and port data compiled by Thomson Reuters Oil Research and Forecasts.

While Saudi Arabia was said to cut production last month despite a pledge in June by the Organization of the Petroleum Exporting Countries and allies to add more barrels, Russian Federation said it has the capacity to lift output to a post-Soviet record.

After the sanctions were lifted in 2016, Indian state-owned refiners stepped up Iranian crude imports as Tehran offered steep discounts on freight. The US government has said it wants as many countries as possible to stop buying Iranian oil. That is fast changing as Iran seeks to maintain deliveries to Turkey amid USA sanctions. The US will also target business conducted by foreign financial institutions with the Central Bank of Iran. U.S. West Texas Intermediate crude futures rose 52 cents to settle at $69.01/Bbl, a 0.8% gain, Kallanish Energy reports.

China is slapping additional tariffs of 25 percent on $16 billion worth of US imports, from fuel and steel products to autos and medical equipment, as the world's largest economies escalated their trade dispute.

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"With global demand remaining healthy and the global heatwave increasing oil demand, I think prices will remain well-supported in the near term", Hussein Sayed, chief market strategist at FXTM, said.

Less than a year after first oil from the U.S. was imported into India, state-owned Indian Oil Corp (IOC) has signed up to buy crude oil from the USA through a term-tender deal, a senior company official said.

Additionally, there are also reports that many US shale oil drillers posted disappointing quarterly results in recent weeks, hit by rising operating costs, hedging losses and a drop in crude prices away from 2018 highs reached between May and July.

EIA also reported on Wednesday that US oil production declined to 10.9 million barrels per day during the week ending July 27, dropping from its record high level of 11 million barrels per day. It's not clear how long the temporary halt will last, but one of the sources said Unipec has no new bookings of U.S. crude until at least October. Global oil demand continues to be robust on the back of strong economic growth.

This mostly affects demand for power fuels such as thermal coal and natural gas.

This is unedited, unformatted feed from the Press Trust of India wire.

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