Oil rises towards $65 as supply concerns outweigh trade disputes
Jul 10 2019
On Monday, WTI crude oil futures for August ended up $0.15, or about 0.3%, at $57.66 a barrel.
A rally in crude that was mainly driven by the U.S. -Iran standoff faltered last week as investors fretted over the possibility of deteriorating demand even as the Organization of Petroleum Exporting Countries and its allies extend their output curbs.
But the US-China trade war has dampened prospects of global economic growth and oil demand. The country is the fourth-largest crude user in the world. Technical issues as well as maintenance at some oil infrastructure pushed output lower.nearly 700,000bpd of the country's crude output remains at risk due to its protracted civil war, according to state-owned National Oil Corporation, which is calling for the global community to intervene in the conflict. This follows pressure from U.S. President, Donald Trump, to bring down prices, while the kingdom of Saudi Arabia is still voluntarily pumping less than an OPEC-led supply deal allows it to.
The European Union on Tuesday urged Iran to reverse its scaled up uranium enrichment that breaches a nuclear deal it agreed in 2015 with world powers.
"I think one of the reasons for sanctions against Iran and Venezuela is opening up the market for American oil sales", Oil Minister Bijan Namdar Zanganeh said in an interview with state TV late Sunday, a transcript of which was provided by his ministry's SHANA news agency.
Oil also gained support from forecasts that USA data would show US crude stockpiles fell 3.6 million barrels in the latest week.
"Traders aren't any wiser, too, on how this will all end for oil and whether there'd be a victor at the end of the day in the crisis", he said. While U.S. -China discussions are starting up again, the White House has warned that reaching an agreement will take time.
He further mentioned some of USA actions in the oil market saying that the U.S.is the world's largest producer of crude oil which had added roughly 3.6 million barrels per day (bpd) to its output over the past two years. But more importantly, because market participants are now more concerned about the state of the global economy-particularly in a still unresolved U.S.
Nigeria and other top oil producers suffered 5.1 million barrels production deficit, translating to five-year low output in June. However, the gains were capped as market participants continued to fret over global economic slowdown, which would impact oil demand, experts noted.
Citing analysts, Reuters said the jobs report was a tailwind for the oil markets.