Surplus oil supplies in the world's biggest economy swelled by 5.78 million barrels last week, and gasoline inventories expanded by 1.88 million, according to the U.S. Energy Information Administration.
"Traders thought that the market was in the process of topping out", John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, said by telephone Friday.
Before the EIA report, benchmark West Texas Intermediate (WTI) crude for July delivery traded down about 0.2% at around $72.01 a barrel, and it dropped to around $71.30 (down about 1.2%) shortly after the report's release.
The San Antonio, Texas company's imports vaulted it over PDVSA's USA refining unit Citgo Petroleum [PDVSAC.UL] as the largest receiver of Venezuelan barrels in the United States this year, the data shows. Gasoline inventories increased by almost 1 million barrels, and distillate stockpiles decreased by about 1.3 million barrels.
Meanwhile, on Wednesday, Charles Schumer, U.S. senate democratic leader, held a news conference at a Washington Exxon station to criticize Trump for gasoline prices jumping 25 percent since the brash billionaire took office a year ago. While Saudi Arabia has avoided pinpointing an exact price target for oil, Bloomberg reported citing people familiar with development that it is aiming for $80 to support the valuation of Saudi Aramco before an initial public offering.
Russia's oil tsar Alexander Novak said ministers from the OPEC cartel and other members of the production pact would discuss how much to increase production next month. "But if Iran and Venezuela will reduce the supply of likely oil will need more that the price of oil rose even more", - he said "Interfax" on the sidelines of the St. Petersburg worldwide economic forum (SPIEF-2018).
Dudley said he saw oil prices falling to between $50 and $65 because of surging shale output and OPEC's capacity to boost production to cover a potential shortfall in Iranian supplies owing to US sanctions.
OPEC and Russian Federation are said to ease supply curbs to offset disruptions in Venezuela and an expected drop in Iranian exports. Refinery utilization rates rose by 0.7 percentage points.
The prospects of renewed sanctions on Iran after US President Donald Trump pulled out of an global nuclear deal with Tehran have also boosted prices in recent weeks.