Oil prices stabilise, but set for big weekly loss amid trade gloom, rising output

Reuters TOKYO | Updated on November 01, 2019

US crude inventories rose by 5.7 million barrels in the week to October 25   -  Reuters

Oil prices steadied on Friday after a rough week, squeezed about 4 per cent lower by a combination of rising global supply and uncertain future demand.

US crude surfaced for air for the first time in four days, gaining 15 cents, or 0.3 per cent, to $54.33 a barrel by 0103 GMT. The contract was heading for a weekly loss of more than 4 per cent. Brent crude was up 6 cents, or 0.1 per cent, at $59.68 a barrel, leaving it also on track for drop of nearly 4 per cent.

Worries over global economic growth, along with oil demand, continued to haunt the market as leaders from the United States and China continue to struggle to end a 16-month dispute that has roiled trade between the world's top two economies. “Concerns about the US-China trade dispute have come home to roost,” said Stephen Innes, Asia Pacific market strategist at AxiTrader. “Framing this doom and gloom view is the massive US inventory build and the horrendous economic data released over the past 24 hours.”

US crude inventories rose by 5.7 million barrels in the week to October 25, dwarfing analyst expectations for an increase of just 494,000 barrels.

Meanwhile, Japanese factory activity sank to more than a three-year low in October, data showed on Friday, in a fresh warning sign for the world's third-largest economy. And on Thursday, official data from China showed factory activity shrank for a sixth straight month last month, while growth in the country's service sector was its slowest since February 2016.

A Reuters survey showed that oil prices are likely to remain pressured this year and next. The poll of 51 economists and analysts forecast Brent crude would average $64.16 a barrel in 2019 and $62.38 next year.

Meanwhile, US crude production soared nearly 600,000 barrels per day in August to a record of 12.4 million, buoyed by a 30per cent increase in Gulf of Mexico output, according to government data released on Thursday.

Those numbers came as a Reuters survey found output from Organization of the Petroleum Exporting Countries (OPEC) recovered in October from an eight-year low, with a rapid recovery in Saudi Arabian production from attacks on oil plants more than offsetting losses in Ecuador and voluntary curbs under a supply pact.

Published on November 01, 2019

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like