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Oil Futures

On Friday’s session, oil futures ended slightly higher, recovering from bear market territory as investors went bargain buying after prices drop to the bottom level in more than three months during persistent worries over an oversupply.

On the NYMEX, delivery of crude oil in September drop to a daily low of $40.57 a barrel, a level not met since April 20, before recovering to end at $41.60 by close of trade, increase 46 cents, or 1.12 percent.

In spite of Friday's modest increases, New York-traded oil futures lost $2.60, or 5.86 percent on the week, the 2nd weekly drop in a row. This August, U.S. oil prices declined 14 percent, its poorest monthly performance since last July.

West Texas Intermediate crude futures are approximately 20 percent, down from their 2016 peaks above $50 a barrel scaled in early June, technically positioning it in bear market territory, as an indication of an ongoing recovery in U.S. drilling activity shared with elevated stocks of fuel products weighed.

On late Friday, Oilfield services provider Baker Hughes stated that the number of rigs drilling for oil in the U.S. the previous week increased by three to 374, the 5th straight weekly increase and the eighth surge in nine weeks.

Gasoline inventories, improved by 452,000 barrels the previous  week. In spite of being in the middle of the peak summer driving season in the U.S., gasoline stocks are well beyond the upper limit of the average range, according to the Energy Information Administration.

The report also presented that total crude oil inventories increase by an unexpected 1.7 million barrels to 521.1 million barrels, which the Energy Information Administration measured to be “historically high levels for this time of year”.

Somewhere else, on the ICE Futures Exchange in London, delivery of Brent oil for October add on 30 cents, or 0.69 percent, on Friday to resolve at $43.53 a barrel by the close of trade after dropping to an intra day low of $42.52, the weakest since April 18.

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This week, London traded Brent futures dropped $3.24, or 7.07 percent, the 2nd straight weekly drop.

Brent crude oil

Brent prices ended July with a monthly loss of 12.7 percent as predictions of increased exports from Middle Eastern and North African producers, such as Iran, Nigeria and Libya added to worries that an oversupply of oil products will reduce demand for crude by refiners.

In early June,  Brent has declined nearly 18 percent since peaking beyond $50, as peak inventories of gasoline products fog the future position for crude.

According to market experts, elevated stocks of fuel products during reducing global demand development is anticipated to keep prices under pressure in the short term.

In the week onward, oil traders will be concentrating on U.S. stock data on Tuesday and Wednesday for fresh supplies and demand indications.

Market participants will also continue to monitor supply interruptions across the globe for additional indications on the rebalancing of the market.

On Tuesday, August 2, the American Petroleum Institute, an industry group, is to post  its weekly report on U.S. oil supplies.

On August 3, Wednesay, the U.S. Energy Information Administration is to release its weekly report on oil and gasoline supplies.

On Tuesday, August 5, Baker Hughes will post weekly data on the U.S. oil rig count.

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