Crude Edges Higher as Concerns Over Global Trade Frictions Ease
Oil Steady as Slowing U.S. Output Signs Counter Trade Threat
(Bloomberg) -- Crude rose for a third day as worries that a U.S.-China trade spat will dampen demand eased.
Futures in New York added 0.8 percent on Monday as equities also climbed amid signals that an ongoing exchange of tariff threats between the world’s two largest fuel consumers might be wearing down. At the same time, the supply outlook was clouded by North Sea strikes and forecasts of declining crude stockpiles in the U.S. A weaker dollar also helped propel crude higher.
“You’re seeing real strength in other markets as well on hopes that there could be resolution with this U.S.-China trade situation. That would help demand in our neck of the woods here for crude,” said John Kilduff, a partner at New York-based hedge fund Again Capital LLC. At the same time, “dollar weakness is having an effect.”
Crude has tumbled for seven straight weeks in New York as turmoil in Turkey added to the risks for energy demand. Rising supplies from OPEC have also weighed on prices, with a report showing Saudi Arabia’s exports up 3.7 percent in June.
West Texas Intermediate crude for September delivery climbed 52 cents to settle at $66.43 a barrel on the New York Mercantile Exchange. Total volume traded Monday was about 33 percent below the 100-day average.
Brent for October advanced 38 cents to end the session at $72.21 a barrel on the London-based ICE Futures Europe exchange and traded at a $6.79 premium to WTI for the same month, the widest for the front-month spread since late June.
In the U.S., crude stockpiles are seen dropping 2 million barrels last week, according to the median estimate of analysts surveyed by Bloomberg. Meanwhile, inventories at the Cushing, Oklahoma, storage hub increased 900,000 barrels last week, according to a forecast compiled by Bloomberg.
Other oil-market news:
- Gasoline futures rose 1.7 percent to settle at $2.0151 a gallon.
- ConocoPhillips said it’ll receive $2 billion in a settlement with Petroleos de Venezuela SA, ending a dispute that’s severely crippled Venezuela’s ability to export the crude oil at the heart of its faltering economy.
- Wild swings in the yuan and punitive storage costs are making oil traders think twice about a bet on China’s fledgling crude futures that looks highly lucrative on paper.
--With assistance from Tsuyoshi Inajima, Catherine Ngai and Grant Smith.
To contact the reporter on this story: Jessica Summers in New York at jsummers24@bloomberg.net
To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net, Carlos Caminada, Debarati Roy
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