The discount on crude prices in Midland, Texas widened by almost $10 a barrel against benchmark futures during the second quarter, as production in the Permian surged beyond pipeline capacity to move oil out of the region.
Crude oil futures rose by Rs 37 to Rs 4,627 per barrel today after participants widened their bets tracking a firming trend in Asia.
OPEC contributes one-third of global oil, adds or removes supplies in the market, which ultimately affect oil prices. Korean companies have been adjusting their crude oil import volume in line with changing relations between Iran and the U.S. Korea that depends on imports for nearly all of its crude oil supply had purchased less than 5 percent of its total needs from Iran between 2012 and 2015 due to the sanctions.
"It's going to be a real tug of war: the higher price of diesel versus a weakening gasoline market", Zachary Rogers, a refining analyst at Wood Mackenzie, said.
Crude prices pulled back from highs earlier in the session as traders cashed in on profits, said John Kilduff, a partner at Again Capital Management in NY.
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.More news: Trump Defends Himself Against Sharp Criticism Over Putin News Conference
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"We expect a fairly rapid lengthening in the (global oil supply) balance", Reid added.
Oil prices dropped on Wednesday after an industry group reported that USA crude inventories rose last week, defying analyst expectations for a significant reduction.
The Energy Information Administration reported United States crude inventories rose by 5.84 million barrels last week, confounding most analysts in a Bloomberg survey who were forecasting a decline.
The official's sentiment is a major step back from the bold USA policy objective of reducing Iranian oil exports "to zero" following President Trump's withdrawal from the Iranian nuclear deal in May.
"Even though the overall crude number was bearish, the gasoline numbers and distillate numbers were pretty bullish", said Phil Flynn, an analyst at Price Futures Group in Chicago, Reuters reported.
United States crude stocks rose by 5.8 million barrels last week, compared with a forecast of a decline of 3.6 million barrels.
Oil has lost about 7% this month over concern an escalating trade conflict between the USA and China could jeopardise global economic growth and energy demand.
With or without Trump's participation in Middle Eastern oil matters, Saudi Arabia looked ready to increase production, with days earlier reports showing that it was planning a record production level in July of 10.8 million bpd-Saudi Arabia's highest level-as it sought to raise exports in an effort to calm market fears that the market was overtightened. That would mean a roughly 1 million bpd increase in output.