Published: Sat, August 17, 2019
Markets | By Otis Pena

Crude Oil Prices Sink as Yield Curve Spurs Recession Fears

Crude Oil Prices Sink as Yield Curve Spurs Recession Fears

U.S. West Texas Intermediate (WTI) crude futures CLc1 slumped $2.68, or 4.7%, to $54.42 a barrel, having risen 4% the previous session, the most in just over a month.

Profit taking after Tuesday's sharp gains also weighed on crude prices on Wednesday, analysts said.

At 440.5 million barrels, USA crude oil inventories are about 3% above the five year average for this time of year, according to the EIA crude oil and petroleum weekly storage data, reporting inventories as of August 9, 2019.

Brent crude LCOc1 was up 38 cents at $58.61 a barrel at 1136 GMT, after falling 2.1% on Thursday and 3% the previous day.

USA crude stocks grew by 1.6 million barrels last week, compared with expectations for a drop of 2.8 million barrels, the Energy Information Administration (EIA) said.

Oil prices fell on Wednesday on disappointing economic data from China and a rise in USA crude inventories, erasing some of the sharp gains in the previous session after the US said it would delay tariffs on some Chinese products, easing trade tensions.

Oil prices dropped on Tuesday after see-sawing throughout the session as lingering concerns over global demand and rising USA output offset expectations for major producers to further curtail supply.

U.S. trade talks with China 'very productive': Donald Trump
Trump's tariff delay coincided with recession fears in USA markets sending stocks to their biggest one-day loss since October. While dumping US Treasuries is clearly a "nuclear option" against the trade war rival, the move could also backfire on China.

"The range-bound behaviour, however, looks set to continue with a focus on U.S".

Apart from signs that the U.S.

The Chinese Ministry of Commerce said in a statement that trade officials from the United States and China had conversed in a phone call and have agreed to talk again in two weeks.

US crude stocks grew by 1.58 million barrels (Mmbbl) last week compared with analysts' expectations for a drop of 2.8 Mmbbl as refineries cut output, the Energy Information Administration said.

After the news that the U.S had chose to postpone tariffs on some Chinese goods, China announced that the two sides will hold new talks in two weeks to try and get the trade deal back o track which sent the oil price surging.

OPEC and its allies, known as OPEC+, have agreed to cut 1.2 million barrels per day (bpd) of production since January 1.

Adding to the risk-off sentiment, China revealed weak data for July, along with a substantial drop in industrial output growth to a more than 17-year low, which fueled concerns of a broadening economic slowdown in the wake of a prolonged U.S.

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