Indian Oil buys U.S. crude to part replace Iran cargoes

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"This will provide a direct boost to GDP growth via higher oil production, which we have already incorporated into our forecasts".

Prices of the barrel of the West Texas Intermediate are trading on a weaker footing today after the EIA reported U.S. crude oil inventories decreased less than initially estimated by 1.351 mbpd during the week ended on August 3. U.S. gasoline stocks climbed 2.9 million barrels last week to 233.87 million barrels, while distillate stocks were up 1.23 million barrels at 125.42 million barrels.

"It is a reality check that this is happening and that Iran's oil exports will be hurt when the oil sanctions hit it in November", chief commodities analyst at Commerzbank Bjarne Schieldrop said.

"Of course, such decisions being taken by the US side are absolutely unfriendly and can hardly be associated with the. constructive atmosphere achieved at the latest meeting of the two presidents", he was quoted by Russian news agency Tass as saying.

"Visible weekly product stocks remain generally at or below five-year averages, a boon for crude demand and margins". Spot Brent crude oil futures were at $73.88 per barrel at 0241 GMT on Tuesday, up 13 cents, or 0.2 percent, from their last close.

West Texas Intermediate crude jumped 0.9% to $69.50 per barrel at 10:30 a.m. ET.

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The trade war between China and the USA has shown enough signs of escalation, with the two economic powerhouses employing tit-for-tat tactics for imposing tariffs in the last few months.

"Without the extra Saudi oil we had in June, it's hard to crunch the numbers and get a lower price going into the end of the year", said John Kilduff of Again Capital.

The United States on Tuesday reimposed sanctions on Iran, the third-biggest producer in the Organization of the Petroleum Exporting Countries. An earlier report from industry group the American Petroleum Institute had suggested inventories fell by 6 million barrels.

Crude production declined 100,000 barrels per day to 10.8 million bpd in the week, according to the report. "Iran sanctions will take another 1 million bpd off the markets", warning that this would leave markets with little spare capacity to deal with unforseen disruptions.

Crude inventories fell by 1.4 million barrels in the last week, compared with analysts' expectations for a decrease of 3.3 million barrels.

Oil Minister Dharmendra Pradhan had last month told Parliament that Iran had in April-June overtaken Saudi Arabia to become the second largest supplier of crude oil to Indian public sector firms. USA refineries produced about 9.9 million barrels of gasoline a day last week, down by about 600,000 barrels compared to the prior week.