Commodities

Oil prices steady amid hopes for end to US-China trade war

Reuters TOKYO | Updated on September 06, 2019 Published on September 06, 2019

Oil prices on Thursday soared more than 2% after the EIA report. File Photo   -  Bloomberg

Brent crude was down 3 cents at $60.92, while US West Texas Intermediate crude was down 10 cents at $56.20 a barrel

Oil prices were steady on Friday, with crude benchmarks poised for multi-week gains amid a sharp drawdown in US crude inventories, while trade tensions eased as Washington and Beijing agreed to hold high-level talks next month.

Brent crude was down 3 cents at $60.92 a barrel by 0850 GMT, while US West Texas Intermediate (WTI) crude was down 10 cents at $56.20 a barrel.

Brent is set to mark its fourth weekly gain, while US crude is headed for a second weekly rise.

Beijing and Washington on Thursday agreed to hold high-level talks in early October in Washington, cheering investors hoping for an end to the trade war between the world’s two biggest economies that has brought tit-for-tat tariff hikes, chipping away at economic growth.

The prolonged dispute had a dampening effect on oil prices, although they have risen over the year, helped by production cuts led by the Organization of the Petroleum Exporting Countries and its ally Russia to drain inventories.

“If trade tensions escalate further, oil demand growth may soften even more, requiring much lower prices,” Giovanni Staunovo, oil analyst for UBS, said in a note analysing oil market trends for 2020.

“On the other hand, unexpected supply disruptions in the Middle East or a surprise production cut by OPEC and its allies may push oil prices higher”.

US crude and product inventories fell last week, with crude drawing down for a third consecutive week despite a jump in imports, the Energy Information Administration (EIA) said.

Crude stocks dropped 4.8 million barrels, nearly double analysts’ expectations, to 423 million barrels, their lowest since October 2018.

Oil prices on Thursday soared more than 2% after the EIA report, although they gradually trimmed gains as investors are not entirely convinced that the Sino-US trade talks will yield results.

“There is still no getting away from lingering demand-side concerns,” said Stephen Brennock of oil broker PVM.

“Consequently, any looming upside potential will be built on wobbly foundations so long as the US and China continue to do battle on the trade front.”

In another sign of a possible global economic slowdown, data released on Friday showed German industrial output unexpectedly fell in July, putting Europe’s biggest economy at risk of falling into a a recession in the third quarter.

European markets slipped from one-month highs and the upbeat mood brought on by progress toward US-China trade talks seemed to fade as markets awaited US jobs data later on Friday.

 

Published on September 06, 2019

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.