Oil prices on ebb tide as gloom gathers over global economy

Galtero Lara
Octubre 9, 2019

Brent for December settlement increased 42 cents, or 0.7%, to US$58.77 a barrel on the ICE Futures Europe Exchange after closing little changed on Monday.

Oil rose from near a two-month low as optimism the United States and China can make progress in trade talks offset forecasts for a fourth weekly gain in American crude stockpiles. -China trade talks in Washington on Thursday.

Subsequently, the futures markets were struggling to stay above water with the WTI crude contract for November delivery losing 39 cents, or 0.7%, to $52.36 a barrel on the New York Mercantile Exchange.

US and Chinese officials will meet in Washington on October 10-11 in a fresh effort to work out a deal, which US President Donald Trump said his administration had a "very good chance" of achieving. "Growing recession risks have capped the upside of oil prices".

Washington is moving ahead with discussions over possible restrictions on capital flows into China, with a focus on investments by USA government pension funds, Bloomberg reported. Both had risen nearly 1% earlier in the day.

The immediate focus now remains on the United States weekly Crude Stocks data due to be published by the American Petroleum Institute (API) later today at 2030 GMT for fresh near-term impetus in the prices.

More news: Alex Trebek Gets Candid on Health, Reveals Possible 'Jeopardy!' Exit

International Monetary Fund (IMF) Managing Director Kristalina Georgieva warned that global economic deceleration could turn into "a more massive slowdown" without action to resolve trade conflicts and support growth.

The EIA also said USA crude production is expected to rise by 1.27 million bpd in 2019 to a record 12.26 million bpd, slightly above its previous forecast for a rise of 1.25 million.

"The macro headwinds outweigh supply concerns for oil now, despite tensions in the Middle East and a reduced spare capacity pillow", said Stephen Innes, Asia Pacific market strategist at AxiCorp.

In Iraq, protests resumed overnight in Baghdad's Sadr City district, though much of the country appeared quieter than it has been for a week.

Iraq's oil exports of 3.43 million barrels per day (bpd) from Basra terminals could be disrupted if instability lasts for weeks, Ayham Kamel, Eurasia Group's practice head for Middle East and North Africa, said in a note.

In other news, Reuters is reporting that Russia, the world's second-largest oil producer said it could increase production rather quickly if Saudi Arabia's production problems were to last longer than expected, according to Russian Energy Minister Alexander Novak.

Otros informes por

Discuta este artículo

SIGUE NUESTRO PERIÓDICO