WTI breaches $ 69 support amid firmer USA dollar, easing storm threats

Chart showing historical Iraq and Iran oil production

OPEC August oil output tops 2018 high: Poll

OPEC crude production rose in August to the highest level this year as a recovery in Libyan output helped to offset a cut in Iranian exports due to USA sanctions.

Near-term futures for Brent crude, the benchmark for more than half the world's oil, are trading higher than later contracts in a market structure known as backwardation that typically signals a supply squeeze.

On Friday, global oil bench mark Brent crude fell 35 cents to settle at $77.42 per barrel, while NYMEX-traded US benchmark West Texas Intermediate (WTI) was down 45 cents for the day to settle at $69.80 per barrel.

Saudi Arabia produced almost 140,000 barrels more in August from a month earlier, two delegates from the Organization of Petroleum Exporting Countries said last week.

Meanwhile, U.S. drillers added oil rigs for the first time in three weeks, energy services firm Baker Hughes reported on Friday, increasing the rig count by 2 units to 862.

"Crude oil export losses from Iran due to USA sanctions, production decline in Venezuela and episodic outages in Libya are unlikely to be offset entirely by corresponding rises in OPEC+ production due to market share sensitivities", the bank said.

The Gulf of Mexico is home to 17 percent of U.S. crude oil production and 5 percent of natural gas output daily, according to the U.S. Energy Information Administration. "Iraq wants to take advantage of the situation in the market - with prices supported by concern over Iran - because they know that if they don't, other countries will".

Libya produced the highest quota of the output pumping as much as 970,000 barrels a day last month compared to 660,000 barrels a day in July, a Bloomberg News survey of analysts, oil companies and ship-tracking data said.

The world's top oil buyers are discovering that U.S. sanctions on Iran will squeeze their trade flows whether they agree with America or not. The move would mean that around 50 percent of Chinese exports to the US would be subject to extra duties.

Trade ministry officials have been trying to secure a waiver allowing the imports to continue but look increasingly unlikely to win one.

OANDA's Innes said it was too early to say whether economic slowdown would put a serious dent in oil prices. This signals tight market conditions as it gives traders an incentive to immediately sell oil instead of putting it into storage.

US West Texas Intermediate (WTI) crude futures were at $69.62 a barrel, down 18c, or 0.3%, from their last settlement.

RCMA's Maher said he expected Brent prices to average $80 per barrel in 2019.

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