Reuters on Friday reported that Asian oil refiners are racing to secure crude supplies in anticipation of tensions with China (which has has threatened a 25 percent duty on imports of US crude) and the sanctions against Iran aimed at shutting the country out of oil market.
Official data that came out on Thursday, a day later than normal due to the July 4 public holiday, showed inventories at Cushing, the delivery point for USA crude futures, fell to their lowest in 3-1/2 years.
FGE said the US government may grant some waivers to allies that are particularly reliant on Iranian supplies, and that some Iranian oil would also be smuggled into markets.
That came after an outage at a major Canadian oil sands facility cut regional supply.
The United States and China have started a trade war on Friday, introducing bilateral tariffs worth 34 billion Dollars, while not showing willingness to start talks with a view to reaching a ceasefire.
Early Friday, WTI Crude was down 0.78% at $72.37, and Brent Crude traded down 1.23% at $76.44.
Oil prices were mixed on Monday, with global prices boosted by ongoing supply issues in Libya, while signs of rising output in the US weighed on West Texas Intermediate crude.
TAIFEX's Brent Crude Oil Futures contract is 200 barrels (31,797.46 liters), and available for trading in both regular and night session (8.45am to 1:45pm and 3.00pm to 5.00am of the next day).
US crude inventories rose by 1.2 million barrels in the week ending June 29, the Energy Information Administration said on Thursday, much higher than analysts' expectations for a decrease of 3.5 million barrels.
China has indicated that it could place a tariff of 25% on US oil.
An executive from China's Dongming Petrochemical Group told Reuters his refinery had already cancelled USA crude orders: "We will switch to either Middle East or West African supplies".
The rally appears to be a "short covering situation - we were down nearly 2% yesterday", said Yawger, Reuters reported.
After noting that China holds about $118 trillion in USA debt, Guilfoyle pointed out that "we've got a pretty hot economy" and that China is struggling in comparison: "They have retail sales in the hole. they've got industrial production in the hole, the Shanghai Composite [stock index] is down 17 percent year-to-date".
An executive from China's Dongming Petrochemical Group said he expected Beijing to soon impose the tariff on USA oil imports.
Brent was also being pressured by expectations of higher Saudi and Russian Federation productions, which impact Europe and Asia, where Brent is the benchmark, more than the markets dominated by the U.S. crude prices.
-China trade dispute, most traders agree that yesterday's government report is exerting the most pressure on the market.
-Chinese trade war and increased production by Saudi Arabia and Russian Federation pulled against concerns over supply disruptions from Venezuela and Libya as well as the looming sanctions on Iran.
"Iran's exports are some 2.7 million bpd, including condensate", it noted.
"Venezuela ... will lose another 400,000 barrels a day by year-end, with production going to below 1-million barrels a day", FGE said, noting that another 300,000 barrels a day of Libyan capacity was disrupted.
Although Saudi Arabia and Russian Federation have both said they would raise output to make up for these disruptions, FGE said "there simply is not enough capacity to make up for Iran's crude losses, plus Venezuela and Libya", and warned of the possibility of oil prices rising to $100 per barrel.