Oil rises 2% with Brent futures hitting a two-week high

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Around one hour after the report was released, West Texas Intermediate (WTI) October delivery traded at 67.40 US dollars at New York Mercantile Exchange, up 1.56 dollars or 2.37 percent from its Tuesday settlement. At the beginning of August, oil prices started their longest weekly losing streak in three years. Refinery utilisation rates remained unchanged last week at 98.1% of total capacity, the highest rates since 1999.

The West Texas Intermediate (WTI) for October delivery price increased by 2.02 US dollars, or 3.07 percent, to settle at 67.86 dollars a barrel on the New York Mercantile Exchange, while Brent crude for October delivery increased by 2.15 dollars, or 2.96 percent, to settle at 74.78 dollars a barrel on the London ICE Futures Exchange.

Distillate fuels stockpiles, which include diesel and heating oil, fell by 1.3 million barrels, compared with expectations for a 207,000-barrel gain, the API data showed.

US investment bank Jefferies said on Friday there was an emerging "lack of demand" for crude oil and refined products.

Nearly 60 percent of the 6.4 million new barrels of oil pumped every day between now and 2023 will come from the United States, according to the IEA.

Government data on Wednesday showed nationwide United States crude stockpiles declined 5.84 million barrels last week, more than double what was expected in a Bloomberg survey of analysts.

A weaker dollar makes oil less expensive for buyers using other currencies.

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 Iran issue continues to occupy traders' minds", said Greg McKenna, chief market strategist at futures brokerage AxiTrader.

Meanwhile, China, the world's biggest oil importer and Iran's biggest customer, is said to have rejected a U.S. request to halt purchases from the producer, dealing a blow to Trump's efforts to isolate the Middle East nation and force it into negotiations. Saudi Arabia told Opec it cut supply in July, rather than increasing output as expected.

Still, the incendiary media headlines that have stoked these fears don't exactly correlate to the economic declines the trade war is expected to cause: Moody's Investor Service said, "These [overall] measures are expected to shave up to 0.3-0.5 percentage points from China's real GDP growth in 2019; for the US trade restrictions will trim off about one quarter of a percentage point from real GDP growth to 2.3 percent in 2019".

U.S. and Chinese officials were set to resume talks on Wednesday, but Trump said he expected there will be no real progress.