Oil prices rise after US confirms trade talks with China to start

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Reuters
KEY POINTS
  • Brent crude was up 21 cents, or 0.4%, at $60.91 a barrel by 0301 GMT. On Wednesday, Brent rose 4.2%.
  • West Texas Intermediate (WTI) was up 17 cents, or 0.3%, at $56.43 a barrel, having risen 4.3% the previous session, the biggest percentage gain in nearly two months.
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An Iraqi worker gauges gas emissions from an oil pipe at the Daura oil refiner
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Oil prices rose on Thursday, rebounding from earlier losses, after the U.S. confirmed that talks with China to reach a trade agreement would be held in the coming weeks, giving hope that a dispute that has roiled global economies will be resolved.

The gains add to a surge in prices on Wednesday that had been driven by a survey showing activity in China’s services sector expanded at the fastest pace in three months in August, as new orders rose in the world’s second-biggest consumer of oil.

Brent crude was up 21 cents, or 0.4%, at $60.91 a barrel by 0301 GMT. On Wednesday, Brent rose 4.2%.

West Texas Intermediate (WTI) was up 17 cents, or 0.3%, at $56.43 a barrel, having risen 4.3% the previous session, the biggest percentage gain in nearly two months.

Both contracts were lower earlier in the Asian trading session after data late on Wednesday from the American Petroleum Institute (API) showed U.S. crude stocks rose last week, against expectations of a decline.

U.S. Trade Representative (USTR) Robert Lighthizer and Treasury Secretary Steven Mnuchin spoke with Chinese Vice Premier Liu He and agreed to hold ministerial-level trade talks in Washington “in the coming weeks”, a USTR spokesman said late on Wednesday.

Shortly after in Beijing, China’s commerce ministry said the talks would be held and “both sides agreed that they should work together and take practical actions to create good conditions for consultations.”

As the trade war between the United States and China has rumbled on into a second year, evidence has been mounting that economies worldwide are being hit, prompting downgrades of oil demand growth expectations.

BP Plc’s Chief Financial Officer Brian Gilvary told Reuters on Wednesday that global oil demand is expected to grow by less than 1 million barrels per day in 2019 as consumption slows.

Still, supply looks set to stay constrained as Russian officials and sources from the Organization of the Petroleum Exporting Countries (OPEC) indicated the countries remain committed to an agreement to rein in production to support prices.

Crude inventories in the United States rose by 401,000 barrels in the week ended Aug. 30 to 429.1 million, compared with analysts’ expectations for a decrease of 2.5 million barrels.

Crude stocks at the Cushing, Oklahoma, delivery hub fell by 238,000 barrels, while refinery crude runs fell by 306,000 barrels per day, API said.

Oil inches higher after US crude stocks draw down, economic worries weigh

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Reuters
KEY POINTS
  • Brent crude futures climbed for a fifth consecutive session on Thursday, rising 6 cents, or 0.1%, to $60.36 a barrel by 0242 GMT on Thursday.
  • West Texas Intermediate (WTI) crude futures rose 10 cents, or 0.2%, to $55.78 per barrel.
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People pass in front of tanks of Brazil’s state-run Petrobras oil company in Brasilia, July 25, 2019.
Ueslei Marcelino | Reuters

Oil prices edged higher on Thursday after a draw down in U.S. crude inventories, but lingering concerns over the global economy and a build-up in U.S. refined product stocks kept a lid on gains.

Brent crude futures climbed for a fifth consecutive session on Thursday, rising 6 cents, or 0.1%, to $60.36 a barrel by 0242 GMT on Thursday.

West Texas Intermediate (WTI) crude futures rose 10 cents, or 0.2%, to $55.78 per barrel.

U.S. crude inventories fell more than expected last week as refineries hiked production, but gasoline and distillate stockpiles showed bigger-than-expected builds, the Energy Information Administration said on Wednesday.

Crude inventories fell by 2.7 million barrels in the week to Aug. 16, compared with analysts’ expectations for a drop of 1.9 million barrels. However, gasoline stocks rose by 312,000 barrels and distillate supplies grew by 2.6 million barrels.

“Amid mounting market concerns about a slowdown in economic and oil-demand growth, it might come as a surprise that crude oil inventories have actually been plunging,” analysis firm Kayrros said in a note.

Traders were worried on the prospects of global oil demand especially amid lingering trade tensions between U.S and China, the world’s two major economies.

“If trade uncertainties persist it will be difficult for oil to shrug off concerns about the threat to global demand,” said Stephen Innes, a managing partner at Valour Markets.

U.S. President Donald Trump on Wednesday said he was “the chosen one” to address trade imbalances with China, even as congressional researchers warned that his tariffs would reduce U.S. economic output by 0.3% in 2020.

Asian shares edged ahead on Thursday after Wall Street got a boost from strong retail results, but minutes of the Federal Reserve’s July meeting showed policymakers were deeply divided over whether to cut interest rates as sharply as markets were wagering.

Meanwhile, oil markets were also supported by simmering tensions between the United States and Iran, with Iranian President Hassan Rouhani cautioning Washington against tightening pressure on Tehran.

If Iran’s oil exports are cut to zero, international waterways will not have the same security as before, Rouhani said on Wednesday.

Echoing Rouhani’s tone, Iranian Foreign Minister Mohammad Javad Zarif said Tehran might act “unpredictably” in response to U.S. policies under President Donald Trump.

Oil dips amid trade worries, but expectations of more OPEC cuts support

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Reuters

KEY POINTS
  • International benchmark Brent crude futures, were at $57.20 a barrel by 0324 GMT, down 18 cents, or 0.3%, from their previous settlement.
  • U.S. West Texas Intermediate (WTI) futures were at $52.45 per barrel, down 9 cents, or 0.2%, from their last close.
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An idled pump jack, once used to extract crude oil from the ground, sits above a well on the edge of a farmer’s field near Ridgway, Ill., Jan. 21, 2015.
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Oil prices fell on Friday amid fears over demand as the U.S-China trade row casts its shadow over markets, although prices got some support from expectations of more OPEC production cuts.

International benchmark Brent crude futures, were at $57.20 a barrel by 0324 GMT, down 18 cents, or 0.3%, from their previous settlement.

U.S. West Texas Intermediate (WTI) futures were at $52.45 per barrel, down 9 cents, or 0.2%, from their last close.

Both contracts jumped more than 2% on Thursday to recover from January lows, buoyed by reports that Saudi Arabia, the world’s biggest oil exporter, had called other producers to discuss the recent slide in crude prices.

Oil prices have still lost more than 20% from peaks reached in April, putting them in bear territory.

Global financial markets have been rocked over the past week after U.S. President Donald Trump said he would impose 10% tariffs on more Chinese goods starting September and as a fall in the Chinese yuan sparked fears of a currency war.

“The tentative oil rebound could be short-lived as the U.S.-China trade dispute is providing no real reasons to be optimistic,” said Edward Moya, senior market analyst at Oanda in New York.

Bloomberg reported that Washington was holding off a decision about licences for U.S. companies to restart business with Huawei Technologies.

Meanwhile, Saudi Arabia, de facto leader of the Organization of Petroleum Exporting Countries (OPEC), plans to maintain its crude oil exports below 7 million barrels per day in August and September to bring the market back to balance and help absorb global oil inventories, a Saudi oil official said on Wednesday.

“Saudi’s production in September will also be lower than it is currently. This helped crude oil rebound from its lowest level since January,” ANZ bank said in a note.

The United Arab Emirates also will continue to support actions to balance the oil market, the country’s energy minister Suhail al-Mazrouei said in a tweet on Thursday.

The minister said the OPEC and non-OPEC ministerial monitoring committee would meet in Abu Dhabi on Sept. 12 to review the oil market.

OPEC and its allies including Russia agreed in July to extend their supply cuts until March 2020 to boost oil prices.

Oil prices rise, escalating US-China trade war caps gains

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Reuters
KEY POINTS
  • Brent crude futures climbed 47 cents, or 0.8%, to $60.28 a barrel by 0351 GMT after earlier dipping to $59.07, their lowest since Jan. 14.
  • West Texas Intermediate (WTI) crude futures rose 47 cents, or 0.9%, to $55.16 per barrel.
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Oil pumpjacks in the Permian Basin oil field are getting to work as crude oil prices gain.
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Brent crude rose on Tuesday, after earlier falling to its lowest since January, as traders betting on falling prices bought back contracts to lock in profits from recent declines caused by the escalating trade dispute between the U.S. and China.

Brent prices have plunged 7.6% since their close on July 31, the day before U.S. President Donald Trump vowed to impose new tariffs on Chinese imports, causing China to retaliate against agricultural imports from the United States, which responded to a decline in the Chinese yuan on Monday by branding the country a currency manipulator later in the day.

Brent fell more than 3% on Monday as traders are concerned the ongoing trade dispute between the world’s two biggest oil buyers will dent demand.

Brent crude futures climbed 47 cents, or 0.8%, to $60.28 a barrel by 0351 GMT after earlier dipping to $59.07, their lowest since Jan. 14.

West Texas Intermediate (WTI) crude futures rose 47 cents, or 0.9%, to $55.16 per barrel.

“The market is back short-covering and there’s also some amount of profit-booking today,” said Sukrit Vijayakar, director of Indian energy consultancy Trifecta, referring to when traders with short positions, or bets on falling prices, buy back futures to lock in profits.

The United States accused Beijing of manipulating its currency after China let the yuan drop to its lowest point in more than a decade. The falling yuan would support Chinese exports by making them cheaper but would raise the cost of oil imports that are priced in dollars. China is the world’s biggest oil importer.

“Oil prices can’t shake off falling demand concerns, as China’s latest escalation with devaluing the yuan and limiting U.S. agricultural purchases derail hopes for a trade deal to be reached this year,” said Edward Moya, senior market analyst at OANDA in New York.

Concerns that the trade conflict has entered a phase of retaliatory action was weighing down on the sentiments in the oil market, which at the moment is taking lesser notice of the Middle East tensions, analysts said.

“Despite the ongoing threat of supply disruption in the Middle East, it is clear that the U.S.-China trade dispute is of more significant concern at the moment,” Stephen Innes, managing partner at VM Markets said in a note.

Iran on Monday said it will no longer tolerate “maritime offences” in the Strait of Hormuz, a day after it seized a second oil tanker near the strategic waterway that it accused of smuggling fuel.

Iran’s seizure of the Iraqi oil tanker had raised some concerns about potential Middle East supply disruptions.

Oil prices may find some support later this week with a preliminary Reuters poll showing U.S. crude oil inventories were expected to fall for an eighth consecutive week.

Oil slips 1% after Fed disappoints, US crude output rises

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Reuters
KEY POINTS
  • Brent crude futures, the international benchmark, fell 62 cents, or 1%, to $64.43 a barrel by 0405 GMT, having fallen more than $1 earlier in the session.
  • U.S. West Texas Intermediate (WTI) crude was down 67 cents, or 1.2%, at $57.91 a barrel, also having dropped more than a $1 earlier.
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A pump jack operates at a well site leased by Devon Energy Production Co. near Guthrie, Oklahoma.
Nick Oxford | Reuters

Oil prices skidded on Thursday, declining for the first time in six days, after the U.S. Federal Reserve dampened hopes for a string of interest rate cuts and Sino-U.S. talks ended without apparent progress towards resolving a bitter trade dispute.

Brent crude futures, the international benchmark, fell 62 cents, or 1%, to $64.43 a barrel by 0405 GMT, having fallen more than $1 earlier in the session. U.S. West Texas Intermediate (WTI) crude was down 67 cents, or 1.2%, at $57.91 a barrel, also having dropped more than a $1 earlier.

The drops came despite a bigger-than-expected decline in inventories in the U.S. and a drop in crude production among OPEC members, along with Libya cutting exports, typically bullish drivers for the market. But U.S. output rose in a market that remains well supplied.

The Federal Reserve cut interest rates on Wednesday, but against expectations the head of the U.S. central bank said the move might not be the start of a lengthy series of cuts to shore up the economy against risks including global economic weakness.

“Supply is plentiful and demand growth is showing signs of weakening globally because of trade conflicts, Brexit and other events that tend to potentially weaken economic growth and, hence, oil demand,” Victor Shum, seniorpartner at IHS in Singapore said by phone.

“There’s a lot of oil out there. U.S. output is growing strongly and in addition to that there is enough spare capacity in Saudi Arabia alone to offset any significant supply disruptions.”

A Reuters monthly poll showed oil prices are expected to be range-bound near current levels this year as slowing economic growth and the protracted trade dispute between the U.S. and China curb demand.

Meanwhile, negotiators from the United States and China, the world’s two biggest economies, wrapped up a round of trade talks on Wednesday without visible signs of progress and put off their next meeting until September.

U.S. crude oil stockpiles fell for the seventh straight week, declining to their lowest levels since November even as production rebounded and net imports increased, the Energy Information Administration said on Wednesday.

Crude inventories fell 8.5 million barrels in the week ended July 26, far exceeding analysts’ expectations for a decrease of 2.6 million barrels.

But output rebounded to 12.2 million barrels per day (bpd), near recent levels, from 11.3 million bpd a week earlier.

Oil output among members of the Organization of the Petroleum Exporting Countries (OPEC) hit an eight-year low in July as a further voluntary cut by top exporter Saudi Arabia deepened losses caused by U.S. sanctions on Iran and outages elsewhere in the group, a Reuters survey found.

Libya’s state-owned National Oil Corp declared force majeure on loadings of crude from the country’s largest oil field on Wednesday.