Analysts said sentiment remained weak as oil prices fell in global markets after industry data showed USA stockpiles of crude unexpectedly rose, starting the new month in negative territory after the largest monthly decline in two years in July.
"Tariffs look set to kick in as soon as September, meaning that any barrels arriving on Chinese shores will be hit with a 25% tariff - taking US crude from an approximately $4/Bbl discount vs. global benchmarks, to a premium of approximately $13.50/Bbl", he added. Brent crude, the global benchmark, shed 2.2 per cent to $72.
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.
Data released by ClipperData on Wednesday showed July's USA oil deliveries to China fell to roughly 280,000 barrels per day (Bpd), compared to around 480,000 Bpd in June.
It was gathered that the Arabic nation's production increased by 230,000 barrels daily in July to 10.65 million barrels per day.
The West Texas Intermediate (WTI) for September delivery lost 0.47 US dollar to settle at 68.49 dollars a barrel on the New York Mercantile Exchange, while Brent crude for October delivery erased 0.24 dollar to close at 73.21 dollars a barrel on the London ICE Futures Exchange.
Oil prices were on the downward trajectory on Tuesday even though Chief Executive Officer, BP, Bob Dudley, said he saw a series of supply-side issues that would be supportive in the short-term, according UPN.
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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 increase in production is aimed at maintaining stability of the (global) oil market within the framework of joint actions of OPEC and non-OPEC countries", Novak said. "A lot of this is the risk premium priced in for Iran and when do we start seeing an impact on supply there", ING commodities strategist Warren Patterson said.
US crude oil exports averaged 1.31 million barrels per day last week, down by 1.37 million barrels per day from the previous week.
US President Donald Trump's decision to pull out of an worldwide nuclear deal and reimpose sanctions on Iran has angered Tehran.
Elsewhere, oil prices may be moving on growing concerns about US-Chinese trade policies.
Meanwhile, trade war concerns have resurfaced again on reports the Trump administration is planning to propose a 25% tariff on goods worth over $200 billion imported from China, instead of the original proposal for a 10% levy. Analysts polled by Reuters had expected a decline of 2.8 million barrels.