Published: Sat, May 25, 2019
Markets | By Otis Pena

Pressured by Rising US Stockpiles, Concerns Over Slowing Economy

Pressured by Rising US Stockpiles, Concerns Over Slowing Economy

-China trade is developing into a more entrenched dispute have also hit prices.

Futures in NY rose as much as 0.9% Friday after plunging 5.7% the day before.

Brent crude, the global benchmark, rose 98 cents to $68.74 a barrel at 1121 GMT but remained on course for a decline of almost 5% this week.

U.S. crude inventories swelled by 4.7 million barrels in the latest week to their highest since July 2017, the U.S. Energy Information Administration reported. US West Texas Intermediate crude added $0.75 at $58.66.

"There's no doubt that concerns about the U.S".

A surprise jump in United States oil stockpiles has also weighed on prices this week.

"The U.S. ... crackdown on Chinese companies not only seriously damages the normal commercial cooperation between both countries, but it also forms a great threat to the security of the global industrial and supply chain", Gao said.

Turkey sees improvement in S-400, F-35 talks with US
Turkish President Recep Tayyip Erdogan said earlier this month that the purchase of S-400s fell under Turkey's "sovereign rights". Turkey is one of the participants in the US F-35 jet program. "We are doing whatever normal bilateral agreements mandate".

Oil extended losses after a surprise jump in American crude inventories alleviated concerns over a supply crunch, while the demand outlook remained bleak as there was no let up in US-China tensions.

Still, supply cuts - both voluntary and those resulting from US sanctions - kept a floor under prices and some analysts expect the market to recover. But one of America's largest and fastest-growing exports has so far stayed out of Beijing's crosshairs: crude oil.

The government also reported that USA crude oil production climbed by 100,000 barrels per day (bpd) to 12.2 million bpd.

Brent's price structure remains in backwardation, with prices for prompt delivery higher than those for later dispatch, suggesting a tight balance between supply and demand. The Director's Cut also reports that drilling permit activity has returned to normal, operators continue to maintain a permit inventory that will accommodate varying oil prices for the next 12 months. China's decision to institute tariffs on gas, as a result, by imposing higher costs on USA gas and sending potential buyers elsewhere, may be causing some investors to rethink whether to fund costly export infrastructure projects in the U.S.

By way of a reminder, at the end of a year ago, a "glut" is reported to have helped contribute to the fact that oil prices took a significant tumble to that $45 per barrel mark, that we all would like to forget happened.

The move put pressure on London oil stocks, with Premier Oil, Gulf Marine Services, Tullow Oil, Nostrum Oil and Gas, and Enquest all among the biggest fallers on the London Stock Exchange this afternoon.

Drone attacks on Saudi Arabia earlier this week called attention to ongoing Middle East turmoil that may prevent oil prices from pulling back to February lows, Mr Kilduff said.

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