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Oil up after OPEC sources say Saudi crude output fell

Reuters  |  NEW YORK 

By Stephanie Kelly

NEW YORK (Reuters) - futures rose on Monday after OPEC sources said Saudi crude production unexpectedly fell in July, raising concerns about global supplies as the prepares to reinstate sanctions against major exporter

Brent crude futures rose 94 cents to $74.15 a barrel, a 1.3 percent gain, by 11:25 a.m. EDT (1525 GMT).

U.S. Intermediate (WTI) crude futures rose $1.23 to $69.72 a barrel, a 1.8 percent gain.

pumped around 10.29 million barrels per day (bpd) of crude in July, two OPEC sources said on Friday, down about 200,000 bpd from a month earlier.

That came despite a pledge by the Saudis and top in June to raise output from July, with promising a "measurable" supply boost.

"The Saudis are reining in production gains in an attempt to maintain Brent pricing" at about $70 to $75 a barrel, Jim Ritterbusch, of Ritterbusch and Associates, said in a note.

U.S. Jefferies said in a note that "the Saudi and Russian production surges appear to be more limited" than expected, adding that the imminent reinstatement of U.S. sanctions against also fed bullish sentiment.

is due to reinstate some sanctions against that it suspended after a 2015 deal between world powers and that sought to curb Iran's nuclear program.

Some of the sanctions will come back on Tuesday at 12:01 a.m. EDT (0401 GMT). The also plans to re-introduce sanctions on Iranian in November, which could dent the OPEC member's output.

Renewed sanctions are part of Trump administration's strategy to deny resources to the Iranian leadership.

wants as many countries as possible to cut imports of Iranian oil to zero, a senior said in a

Most Iranian crude exports go to and India, but roughly 20 percent go to Europe, where refiners have already cut their purchases.

Meanwhile, U.S. cut for a second time in the past three weeks as the rate of growth has slowed over the past couple of months. [RIG/U]

Oil prices "may also be finding support from in the U.S.," said analysts in a note.

"Admittedly, there is surging from one record high to the next. However, low pipeline capacities in particular are preventing any more pronounced increase, and are delaying the rebalancing of global supply and demand."

(Additional reporting by in London and Henning Gloystein in Singapore; Editing by and David Gregorio)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, August 06 2018. 21:17 IST