Oil Caps Worst Week Since July as Trump Revs Up China Trade Feud
Oil is set for biggest weekly loss since July on indications Saudi Arabia is restoring lost crude production quicker-than-expected
(Bloomberg) -- Oil in New York capped its worst week since July as U.S. President Donald Trump’s administration escalated trade tensions with China in a protracted dispute that’s imperiled world energy demand.
Futures fell almost 1% Friday after seesawing earlier. In the latest salvo in the trade war between the world’s biggest economies, U.S. government officials are considering caps on American money flows into China, a measure with major implications for billions of dollars in investments, according to people familiar with the deliberations.
Earlier in the session, crude bounced off a low not seen since before the Sept. 14 attacks on Saudi Arabian oil installations. Trump said in a tweet on Friday that he rebuffed Iran’s request for sanctions relief in exchange for negotiations.
“That would mean little hope of Iranian oil returning to the market any time soon,” said Phil Flynn, senior market analyst at Price Futures Group Inc., said by telephone.
Prices ended the week 3.8% lower, weighed down by Saudi Arabia’s quick recovery of oil output following aerial attacks that rocked global energy markets. The kingdom’s production had reached 9.8 million barrels a day, which is about the same level as before the attacks, Dow Jones reported, citing unnamed officials.
West Texas Intermediate for November delivery settled 50 cents lower at $55.91 a barrel at the New York Mercantile Exchange.
Brent for the same month dropped 83 cents to settle at $61.91 on the ICE Futures Europe Exchange and traded at a $6 premium to WTI. The contract ended the week 3.7% lower.
The Saudis agreed to a limited cease-fire in parts of Yemen and diplomatic efforts were underway to expand the truce, according to a Yemeni government official and a diplomat. Houthi rebels embroiled in the war in Yemen said they launched the attacks on Saudi infrastructure, although the U.S. and other powers have blamed Iran.
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To contact the reporter on this story: Sheela Tobben in New York at vtobben@bloomberg.net
To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Catherine Traywick, Christine Buurma
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