Oil steadies to trade higher after losses Oil&Gas 09:55

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OIL traded near $68 a barrel after sliding for two consecutive sessions as rising USA inventories and higher output from the Organization of Petroleum Exporting Countries (Opec) and Russian Federation weighed on the market.

South Korea's imports of USA crude jumped more than fourfold to 14.1 million barrels in the first half of the year from a year ago, according to data from state-run Korea National Oil Corp.

Overall U.S. crude oil inventories actually rose by 3.8 million barrels last week to 408.74 million barrels C-STK-T-EIA , the EIA data showed. That's an average monthly intake of 2.35 million barrels of USA crude.

"Unipec saying they won't buy USA crude and China saying they won't comply with Iran sanctions are bearish", Jakob from Petromatrix said.

Price differentials for the medium-sour Mars grade to Dubai quotes on arrival in North Asia have fallen to 50 cents to $1 a barrel, down from indications of $1-$1.50 at the start of July, partly as China avoided US crude due to potential import tariffs.

Output by top exporter Saudi Arabia has also risen recently, to about 11-million bpd, and U.S. production is around that level as well.

There were also factors holding oil markets in check.

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It produced about 11.21 million barrels per day, an increase of 140,000 from a month earlier, according to Bloomberg calculations based on the ministry's data.

The US believes Iran is preparing to carry out a major exercise in the Gulf in coming days, apparently moving up the timing of annual drills amid heightened tensions with Washington, US officials told Reuters on Wednesday.

A supertanker arriving South Korea in October for SK Energy hold 500,000 barrels of Mars crude, along with other grades such as West Texas Intermediate (WTI) Midland, the sources said, while GS Caltex bought 2 million barrels of Mars.

The kingdom has been under acute pressure from President Donald Trump to open the taps as he chokes off exports from Saudi's political rival, Iran.

“There are a lot of escalation points that could occur very quickly and that worries me, ” Barratt said.

Oil last month posted the worst loss in two years on concern a trade war between the United States and China could curb economic growth and limit energy demand. After Trump called for a 15 percent increase in tariffs on Chinese goods earlier this week, Beijing on Friday announced it was targeting $60 billion worth of USA goods in response. "This could severely dent the competitiveness of USA oil and derivatives in the Chinese market", said Abhishek Kumar, senior energy analyst at Interfax Energy.

Oil prices could soon rally above $90 a barrel amid growing concerns over the prospect of steep declines in Iranian crude, according to industry analysts.