Insight and inspiration in turbulent times.
Oil prices slipped last week with Brent down 1.8 percent to close at $59.42. WTI closed $53.82, down 1.7 percent. Concerns increased about China’s economy, which slowed to 6 percent year-over-year growth in the third quarter, the slowest growth in 27-1/2 years.
Oil prices rose 2 percent on Friday after the US and China seemed to hammer out a trade deal that postponed tariffs. However, after studying the details – or lack thereof – investors lost much of their enthusiasm.
The US oil and gas rig count fell by eight this week, according to Baker Hughes, adding to months of losses, as US oil production falls to its lowest level since October 2018.
After six days of steady price drops that took prices down about $5 a barrel, oil rebounded about 1 percent on Friday. The rebound came on news that Iran had seized a British registered tanker while sailing in Omani waters through the Straits of Hormuz.
The storm in the Gulf of Mexico and geopolitical tensions in the Middle East pushed New York oil futures above $60 a barrel last week, with NY closing at $60.31 and Brent at $66.86.
Concerns about the weakening global economy and oil demand growth trumped Middle Eastern tensions and the OPEC+ rollover of the production cuts into 2020, sending oil prices lower for most of last week.
Oil exports from the Persian Gulf have been peaking in the last 3 years 2016-2018 at around 22.3 mb/d. That was before the US sanctions on Iran were tightened in the 1st half of 2019.
After a week of rampant speculation about what could happen at the G20 summit that would affect oil prices, the announcement on Saturday that the US and China have agreed to keep the current tariffs in place for now and would resume trade negotiations left the situation about where it has been for months.
Brent futures dropped steadily for the first three days last week, falling to a low below $60 on Wednesday before the attack on two oil tankers just south of the Straits of Hormuz. Prices then rebounded to close the week at $62.01.
US oil prices sank into bear market territory on Wednesday, falling more than 20 percent below the April peak. Traders were concerned that a 6.8-million-barrel build in US crude stocks indicated lower prices ahead.
Oil prices fell on Friday posting their biggest monthly drop in six months, after President Donald Trump threatened tariffs on imports from Mexico.
Oil prices plunged on Friday with New York futures falling about $5 a barrel. Precipitating the fall were concerns that there is no end in sight to the US-China trade war and that the global economy could slow by enough to affect oil demand.
