OPEC lifted crude production in July

Saudi Arabia reins in oil production as demand forecasts waver

Estimates are based on preliminary data from direct communication for non-OPEC supply, OPEC NGLs and non-conventional oil, while estimates for OPEC crude production are based on secondary sources.

Crude prices were lower Monday morning, with West Texas Intermediate for September delivery trading down about 0.4% at $67.33. "But this was not enough to prevent the inventory build".

Japan and South Korea, where summer consumption was bumped up by an unusual heat wave, jointly imported around 6.3 million bpd of crude in July, compared with an average of 6 million bpd in the first half of the year.

Meanwhile, investors were watching the impact of USA sanctions on Tehran, which analysts say could remove as much as 1 million bpd of Iranian crude from the market by next year.

OPEC expects that average oil production in Russian Federation will be 11.15mn barrels per day in 2018 and 11.17mn barrels daily in 2019.

A preliminary report on last week's US inventory levels is due for release by the American Petroleum Institute later Tuesday and more definitive numbers by the US Energy Information Administration on Wednesday. Production from Nigeria and Iraq more than made up for the Saudi's July output reduction. This shows Saudi Arabia is "not doing what they said", said Tradition Energy analyst Gene McGillian.

In July, Saudi Arabia told OPEC it cut production by 200,000 bpd to 10.288 million bpd.

In addition, OPEC reduced its projection for global oil demand growth for this year by 20,000 to 1.64 million bpd, while lowering the forecast for the next year by 20,000 to 1.43 million bpd.

OPEC's July output is 270,000 bpd more than OPEC expects the demand for its oil to average next year, suggesting a small surplus in the market should OPEC keep pumping the same amount and other things remain equal. "That, combined with the OPEC report confirming that the Saudis reined back output in July after opening the spigots in June, appears to have alleviated the downward pressure on crude", said Vandana Hari, founder of Vanda Insights, in a note Tuesday.

Trade tensions with the US have weakened currencies in emerging markets as investors pull cash out of countries like India and China and convert it to USA dollars, which are still seen as a safe haven.

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