Published: Fri, August 09, 2019
Markets | By Otis Pena

Oil sets new seven-month low on trade tensions grow

Oil sets new seven-month low on trade tensions grow

U.S. West Texas Intermediate crude futures settled up $1.45, to $52.54/Bbl, 2.84% higher, Kallanish Energy reports. Better-than-expected trade data from China is also helping to boost prices as well as a steadying of the Chinese yuan currency at slightly better than 7 to 1 U.S. Dollar.

The West Texas Intermediate for September delivery rallied 1.45 USA dollars to settle at 52.54 dollars a barrel on the New York Mercantile Exchange, while Brent crude for October delivery rose 1.15 dollars to close at 57.38 dollars a barrel on the London ICE Futures Exchange.

Each contract jumped more significant than 2% on Thursday to recover from January lows, buoyed by reports that Saudi Arabia, the world's largest oil exporter, had called different producers to debate the latest slide in crude costs. -China trade dispute could further dampen demand growth this year.

Crude oil futures hit their lowest levels since early 2019 on Wednesday after data from Energy Information Administration showed a significant jump in USA crude stockpiles in the week ended August 2, after seven successive weeks of declines.

Esparza added that a weaker US dollar has also lent support to the oil price rebound.

The producer and its partners in the OPEC+ coalition are determined to do what they can for market stability, they said.

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"Saudi Arabia is committed to do whatever it takes to keep the market balanced next year", the official said.

This week, the EIA reduced its forecast USA demand for crude and liquid fuels. The biggest crude exporters have already been laboring since the beginning of the year to shore up prices by cutting production.

The kingdom will keep a lid on supplies next month, providing customers with 700,000 barrels a day less than they requested, according to Saudi officials who asked not to be identified.

"The market continues to trade lower on concerns about demand growth and the idea that economic growth can be impacted by the trade war", Reuters quoted Gene McGillian, vice president of market research at Tradition Energy in Stamford Connecticut, as saying.

"It is hard to imagine what that would look like given how hard it was to get the OPEC+ to agree to the production limit agreement, but given the potential free fall from crude if the trade war continues, no option is off the table", he said, referring to OPEC+, a group including OPEC and non-OPEC producers such as Russian Federation.

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