Oil slips as trade dispute outweighs USA stock decline

26 August, 2018, 12:29 | Author: Lora Ball
  • US President Donald Trump said various trade talks would take time signalling a major breakthrough in US-China trade talks was unlikely

On the supply side, US crude oil production C-OUT-T-EIA rose back to 11 million barrels per day, the EIA report said. West Texas Intermediate, the US benchmark, was up 1.9 percent to $67.09 per barrel.

US crude rose more than 4 percent on the week, after seven consecutive declines, and Brent rose 5.3 percent after three weeks of falling prices.

"You're seeing somewhat of a relief rally here and part of it is technical in nature for crude", with oil bouncing off the $65 level and 200-day moving average, said Rob Haworth, who helps oversee $151 billion at U.S. Bank Wealth Management in Seattle.

Petroleum prices rose to session highs on Wednesday after government data in the USA showed a larger-than-anticipated drop in crude inventories as imports stateside fell and refineries continued to run near full capacity.

Brent crude oil LCOc1 settled up $1.09 a barrel, or 1.5 percent, at $75.82 a barrel.

Due to the geo-political turmoil, with the US-China trade war and the rising tensions in Turkey pushing down emerging markets, oil has seen its seventh straight week of declines.

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China's shipowners are shunning Iran's oil, while the OPEC producer is using its own tankers to supply top customers as impending United States sanctions threaten to disrupt global crude trade.

The dollar fell after Federal Reserve Chair Jerome Powell said steady rate hikes are the best way to protect the US economic recovery. Instead, both countries activated another round of dueling tariffs on US$16 billion worth of each other's goods.

West Texas Intermediate, light crude oil is on track for a seventh week of losses, with a fall of more than three per cent.

"These (overall) measures are expected to shave up to 0.3-0.5 percentage points from China's real GDP growth in 2019", said rating agency Moody's Investor Service.

Platts went on to report that the U.S. "exported 141,000 barrels per day of petroleum products to China in May, a 10-month low", while "China's crude oil imports from the U.S. fell sharply in July and August from June as state-owned Sinopec, the world's biggest refiner by capacity, was forced to reverse plans to lift significantly higher volumes of US crude this year".

Futures in NY were little changed after capping a five-day run of gains yesterday.

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