Oil rises as USA inventories fall

US President Donald Trump said various trade talks would take time signalling a major breakthrough in US-China trade talks was unlikely

USA crude inventories fell 5.8-million barrels last week, the Energy Information Administration (EIA) said, more than the 1.5-million-barrel draw forecast by analysts polled by Reuters.

West Texas Intermediate crude for October delivery traded at $67.80 a barrel on the New York Mercantile Exchange, down 3 cents, at 9:14 a.m.in Tokyo.

The strength of the greenback has an inverse relationship to the price of crude oil. Over the past four weeks, refinery input averaged 17.73 million barrels per day which was 1.3 percent higher than the same four-week period of previous year.

In June, China was the biggest foreign buyer of American crude, importing a record 15 million barrels that month.

A weaker USA dollar makes oil, which is priced in dollars, less expensive for buyers in other currencies.

In May, the difference between crude oil exports and imports increased even further, to 470,000 barrels per day.

U.S. crude inventories fell by 5.2 million barrels in the week to 17 August, to 405.6 million barrels, ahead of analysts' forecasts for a fall of 1.5 million barrels, according to data from industry group the American Petroleum Institute.

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On the supply side, US crude oil production rose back to 11 million barrels per day, the EIA report said.

Two major geopolitical events have been affecting the volatility of oil prices: US President Donald Trump is sticking to his pledge to cut off Iran from the rest of the world with economic sanctions, squeezing the country's energy trade.

Brent crude futures rose $1.48, or 2%, to $74.11 a barrel, by 2.57pm GMT.

"The Iran issue continues to occupy traders' minds", said Greg McKenna, chief market strategist at futures brokerage AxiTrader.

Iran is the third-biggest producer within the Organization of the Petroleum Exporting Countries (OPEC), exporting on average around 2.5 million barrels per day (bpd) of crude and condensate this year, equivalent to around 2.5 percent of global consumption.

Opec has started to boost supplies following a deal with Russian Federation and other allies in June, although producers have been cautious so far.

Concerns that an escalating trade war between China and the US could slow economic growth and weigh on crude purchases eased slightly after sources told Reuters that China's Unipec will resume purchases of USA crude oil in October, after a two-month halt due to the fight.

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