Oil steady, supported by USA stocks and supply concerns

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President Trump demanded Thursday that the Organization of Petroleum Exporting Countries immediately work to lower oil prices.

But on Tuesday Bloomberg cited unnamed Saudi sources as saying the kingdom was comfortable with oil above $80, at least for the short term, helping to push prices higher.

"The OPEC monopoly must get prices down now", Trump insisted in the message.

The world's biggest crude exporter believes it may no longer be possible to avoid higher prices as USA sanctions on Iranian exports crimp supply, according to people familiar with Saudi Arabia's view.

Reuters reported two weeks ago that Saudi Arabia wanted oil to stay between $70 and $80 a barrel for now, seeking a balance between maximizing revenue and keeping a lid on prices until us congressional elections.

US West Texas Intermediate crude was up 55 cents, or 0.8 per cent, at $71.67 a barrel, after rising almost 2 per cent the previous session.

Oil prices have increased from about $50 a barrel last September to more than $70 a barrel today, with a rebalancing of supply and demand in the market as well as major weather and geopolitical events playing a part.

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"The last thing that he is going to want to have happen is diesel prices and oil prices hitting highs when people are going to the voting booth", Zahir said.

The market remained bullish after news of another fall in USA crude inventories.

As the Brent-WTI spread started widening to average $5 a barrel in the first half of 2018, East Coast refineries again increased their purchases of domestic crude oil, but this time in far lower quantities than in 2015, the EIA noted.

Opec and oil producers outside the group, including Russian Federation, will meet on Sunday to revise oil production quotas. For the same period, analysts expected crude inventories to decrease by about 2.7 million barrels.

Tanker tracking and industry data show Iranian exports of crude have already begun to decline well before the imposition of new USA sanctions on Tehran.

It will be their last meeting before the U.S. midterm elections next month. The oil prices were increased to its highest level until this year. Perry credits the two countries with averting a "spike in oil price".

Distillate fuel oil supplied over the last four-week period averaged 4.04 million barrels per day, down 0.8 percent from the same period a year ago. That's because Saudi Arabia and Russian Federation - the group's two largest producers - have already moved beyond the 2016 deal to cut output, and U.S. President Donald Trump is pushing them to do even more.

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