Saudi Arabia, fellow members of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russian Federation agreed last month to increase output to dampen price gains and offset global production losses in countries including Libya.
Oil's price fall was aided by news Libya-based National Oil Corp.
Asian trade sources noted that, other Middle Eastern producers including Iraq, Kuwait and Iran will likely follow suit and lower their new monthly OSP differentials this week.
However, there was speculation that Saudi Arabia, which has about 18 percent of the world's proven petroleum reserves, would tap into its spare capacity of 2 million barrels per day to add more oil to the markets, while United States shale production also remained robust.
Futures in NY fell as much as 1.3 percent after the Trump administration unveiled a list of $200 billion in Chinese goods that could face 10-percent tariffs after public consultations end on August 30.
Oil fell below $74 a barrel after US President Donald J. Trump raised the stakes in the trade war against China with the biggest list yet of goods it may hit with higher tariffs.
"The trade conflict could eventually weaken the two countries' economies and, in particular, decrease China's crude demand", Makiko Tsugata, senior commodity analyst at Mizuho Securities Co., said by phone.
USA crude futures rose 26 cents to settle at $74.11, after hitting a high of $74.70. At the heart of the problem for buyers is a USA threat to cut off access to the American banking system for foreign financial institutions that settle trades with the Middle East nation's central bank.
"Some of the Eagle Ford recently traded down to 50 cents/b [premium] to Dated Brent". The rate of growth has slowed over the past month or so with a decline in crude prices from late May through late June. Is it big buyers of Iranian crude?
S&P Global Platts data showed that the spread between the front-month WTI swap and same-month Dubai crude swap tumbled to minus $7.74 early last month, but the discount has narrowed to $2.96/b last Friday.
Brent crude futures rose 82 cents to $75.27 a barrel, a 1.1 percent gain, by 1:14 p.m. EDT.
Brent crude futures gained 79 cents to settle at $78.86 per barrel.
"You've got United States competition coming left, right, center and landing cheaper". That opens up the possibility that the US won't take a "zero tolerance" policy towards countries importing oil from Iran, or that there could be some sort of phased implementation.