Oil steady as easing US-China tension, US stockdraw support

08 April, 2018, 02:14 | Author: Luis Fowler
  • IPMAN says scarcity of petrol continues without product to load

Prices have fallen despite a drop in USA oil inventories and dwindling OPEC output.

Brent for June settlement declined 2 cents to US$68 a barrel on the London-based ICE Futures Europe exchange, after slipping 10 cents yesterday.

May WTI crude oil futures settled at $63.51, up $0.50 or +0.79%.

Yuan-denominated oil futures on the Shanghai International Energy Exchange were little changed at 402.3 yuan a barrel after the September-delivery contract closed 3.4% lower on Tuesday.

U.S. West Texas Intermediate crude for May delivery was up 19 cents, or 0.3 percent, at $63.56 a barrel by 0140 GMT after settling down 14 cents.

The trade spat between the U.S. and China has also been escalating, with China replying with tariffs on some US$50 billions of USA imports after the White House announced more tariffs on Chinese products last week; the potential trade war has been rattling financial markets, especially in Asia.

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China today confirmed a 25 per cent levy on $50bn (£36bn) worth of US goods, including vehicles and agricultural products like soybeans, in response to US President Donald Trump's planned tariffs on on Chinese goods.

Oil prices retreated on Wednesday as trade tensions between China and the United States dampened investor sentiment. Analysts surveyed by The Wall Street Journal expect on average that crude stocks increased by 1 million barrels in the week ended March 30. Oil prices have recently closely tracked equities.

Gasoline inventories fell in the reporting period by 1.1 million barrels, after a weekly draw of 3.5 million barrels in the prior week, and distillate stockpiles moved higher by 500,000 barrels.

As U.S. production levels sore, the country is exporting more of its own oil and importing less from foreign sources. The extent to which it counterbalance output cuts from the Organization of the Petroleum Exporting Countries (OPEC) will be critical, said Gene McGillian, manager of market research at Tradition Energy in Stamford.

Despite their numbers, Russian Federation and Saudi Arabia say they will set up a joint mechanism to govern OPEC and NOPEC cooperation will be set up by the end of the year, with talk at an energy conference in Baghdad suggesting that the supply freeze may have to be extended, instead of cut short.

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