Hedge funds and other money managers cut their bullish wagers on USA crude futures to the lowest level since mid-June.
Around one hour after the report was released, West Texas Intermediate (WTI) October delivery traded at 67.40 USA dollars at New York Mercantile Exchange, up 1.56 dollars or 2.37 percent from its Tuesday settlement.
Oil prices slipped on Thursday as an escalating trade dispute between the United States and China outweighed the bullish impact of a decline in U.S. commercial crude inventories.
"The strength is really primarily from the weak dollar and also you're getting another week of expectations that you will see crude stocks drop", said Gene McGillian, manager of market research at Tradition Energy.
Traders said the supply versus demand outlook for oil markets was relatively tight because of the looming US sanctions against Iran, which will target oil exports from November.
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Advancing issues outnumbered declining ones on the NYSE by a 1.88-to-1 ratio; on Nasdaq, a 2.32-to-1 ratio favored advancers. ENERGY: U.S. benchmark crude rose $1.16 to $67 per barrel in electronic trading on the New York Mercantile Exchange.
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The prospect of a drop in oil exports from Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries, in response to new US sanctions is also supporting the market.
India's crude oil imports declined amid fear of sanctions from the USA as back in June the U.S. has also asked all countries including India, to stop oil imports from Iran by November or else face sanctions from the US. The contract had already gone up by $0.52 to trade at $66.43 per barrel on Monday this week.
Meanwhile, Brent crude, which is the global benchmark of crude oil, rose by $1.48 to $74.11 a barrel.
Both oil benchmarks saw low liquidity during early trading on Friday.
US commercial crude oil inventories C-STK-T-EIA fell by 5.8 million barrels in the week to August 17 to 408.36 million barrels, the Energy Information Administration (EIA) said in its weekly report. According to a survey whose results were compiled by Bloomberg, stockpiles at the Cushing, Oklahoma storage hub went up by 900,000 barrels in the previous week.
Oil markets were steady on Friday as the unresolved trade dispute between Washington and Beijing muted activity.