On Wednesday, the 22nd of May 2019, the Crude oil futures lost roughly 2 percent, as a surprising rise of US oil inventories had added to investors' worries that a long and costly Sino-US trade war would be curbing industrial activities alongside crude oil demands eventually.
Futures in NY rose as much as 0.9% Friday after plunging 5.7% the day before.
Brent for July settlement was up 93 cents to US$68.69 a barrel on the London-based ICE Futures Europe exchange. This issue was further fueled by data from the U.S. Energy Information Administration (EIA) that showed a surprising crude oil stockpile buildup of about 5 million barrels for the second week in a row.
News on Thursday that companies were suspending business with Chinese telecom giant Huawei after it had been blacklisted by Washington caused West Texas Intermediate to settle $3.51 lower at $57.91 per barrel, tumbling 5.7 percent; WTI is on track to end the week 7.7 percent lower and post the worst weekly performance in five months.
Weekly U.S. rig count data, an indicator of future output, showed U.S. energy firms this week reduced the number of oil rigs operating for a third week in a row. Besides, the US sanctions on Iran and Venezuela may support oil prices from going further down. "But with that said, it's driving season and that means you get an overwhelming spike in demand in the US and everywhere else", said Bob Yawger, director of futures at Mizuho Securities USA.
More disturbing was the argument that weak crude demand is spreading from developed nations to emerging economies: that was the contention of Oxford Economics, which also stated in a research note that "We are now forecasting 4 percent oil demand growth for this year [for China], but this assumes a significant acceleration in the remainder of 2019".
The supply cuts have had a say on Brent crude prices.
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Commerzbank's Carsten Fritsch pointed to "general market sentiment and a broad sell-off in commodities, whilst gold is up".
A report showing USA crude explorers cut drilling activity last week may have eased concern over growing oil supplies, said Ashley Petersen, an oil analyst at Stratas Advisors LLC in NY. -China trade dispute is affecting the US economy.
The Organization of the Petroleum Exporting Countries (OPEC) has led supply cuts since the start of the year aimed at tightening the market and propping up prices.
A jump in US crude inventories primarily caused by low refinery runs helped drive prices lower.
Outside the United States, Saudi Arabia on Wednesday said it was committed to a balanced and sustainable oil market.
"If we don't have strong enough demand growth, the market's telling us we can't justify oil in the mid-60s", he said.