Sign Up for FREE Daily Energy News
 
BREAKING NEWS:
Copper Tip Energy Services
Hazloc Heaters
WEC - Western Engineered Containment
Copper Tip Energy
Hazloc Heaters
WEC - Western Engineered Containment

Oil Rises as Tight U.S. Supplies Counter Trade War Pessimism


By Sharon Cho and Alex Longley

(Bloomberg)

Oil rose as a forecast decline in U.S. crude inventories countered pessimism driven by a surprise contraction in American manufacturing and a warning to China from President Donald Trump.

Futures in New York climbed as much as 1% after closing 2.1% lower Tuesday. American stockpiles fell for a third week by 3.45 million barrels last week, a Bloomberg survey showed before official data due Thursday. That came after a U.S. factory gauge fell to its weakest level since 2016 and Trump tweeted that it will be tougher for China to secure a trade deal if it waits until he wins the 2020 U.S. presidential election. Elsewhere, financial assets rose on a report that Hong Kong Chief Executive Carrie Lam will formally withdraw a controversial bill that would have allowed extraditions to China.

American weekly oil production hit a record last month

Crude has fallen around 18% from a high in late April as the trade war escalated and its toll on the global economy became more apparent. Still, that has come against a backdrop of output curbs by the Organization of Petroleum Exporting Countries and its allies that has helped to tighten supply this year, with both Brent and WTI currently in a bullish backwardation structure that indicates scarce supplies.

“It’s all about the economy isn’t it,” says PVM Oil Associates analyst Tamas Varga. “The fundamental backdrop is not bad in oil for the rest of the year and it’s reflected in the structure of the market as well.”

WTI for October delivery rose 51 cents, or 1%, to $54.45 a barrel on the New York Mercantile Exchange as of 11:36 a.m. in London. Brent for November settlement added 37 cents, or 0.6%, to $58.63 a barrel on the ICE Futures Europe Exchange. The global benchmark crude traded at a $5.49 premium to WTI for the same month.

Trump sought to prod China into doing a trade deal before the presidential election next year as the two sides struggled to agree on the schedule for a planned meeting later this month. “Think what happens to China when I win,” he said in a tweet Tuesday. “Deal would get MUCH TOUGHER!”

The Institute for Supply Management’s purchasing managers index fell to 49.1 in August, weaker than all forecasts in a Bloomberg survey of economists, data released Tuesday showed. Readings below 50 indicate the U.S. manufacturing economy is generally shrinking.

Other oil-market news:
  • Hurricane Dorian is picking up speed as it moves toward the U.S. East Coast, and will likely soon reach within 80 miles of Florida, leaving behind the destruction from a brutal and deadly two-day stay in the Bahamas.
  • Production has resumed at Gazprom Neft PJSC’s Prirazlomnoye oil field in the Arctic after planned maintenance work, with the first shuttle tanker leaving the field Wednesday, according to ship tracking data compiled by Bloomberg.
  • Growth in U.K. North Sea oil production will outpace natural gas this year, with combined output set to rise by 3%, according to industry association Oil and Gas U.K.
  • Saudi Aramco aims to produce more petrochemicals than Exxon Chemicals, Dow and Sabic within 10 years, the company said in a weekly newsletter The Arabian Sun, citing remarks to employees by Olivier Thorel, executive director for chemicals.


Share This:



More News Articles


New SHOWCASE Directory Companies

 

Millennium Directional
U of C Executive Education
Alliance Borealis Canada Corp.
Kicker Video
John Brooks
DRYAIR Manufacturing Corp.
Stress Engineering
RAE Engineering