Oil Higher on Surprising Data
- Author: Wendy Palmer Apr 09, 2018,
Apr 09, 2018, 0:19
Oil rose toward $64 a barrel as investors received a reprieve from growing American crude stockpiles and on signs that trade tensions between the US and China may ease.
Global equities sank after China unveiled its charges, which match the scale of proposed US tariffs announced earlier this week and ratchets up tension in a brewing trade war between the world's two largest economies.
On Thursday Trump said he was asking the United States Trade Representative to consider $100 billion more in tariffs as a retaliation against China.
"Instead of addressing its misconduct, China has retaliated against American farmers and manufacturers", the White House countered. Risk assets, including equities, rallied as Chinese and American officials indicated they're willing to negotiate on escalating frictions, helping to calm fears that a trade war could derail the strongest global growth in years.
June Brent crude oil finished the session at $68.12, up $0.48 or +0.71%.
Brent crude futures were down 1.81 per cent at $66.89 per barrel at the time of writing, while the U.S. benchmark West Texas Intermediate (WTI) was down 1.89 per cent at $62.31 per barrel.
The price of oil has been stuck between the rise in US shale and a deal from the Organization of the Petroleum Exporting Countries' and Russian Federation to curb production and end a global supply glut.
The effect of EIA's report is likely to be limited this week, as yesterday a Bloomberg survey among industry analysts revealed OPEC's production last month had fallen to a 12-month low.
The crude oil prices went up after surprising data for drops in United States inventories. Also lending support for U.S. West Texas Intermediate and international-Brent crude oil was Russian Energy Minister Alexander Novak's comments that a joint organization for cooperation between OPEC and non-OPEC countries may be set up once the current deal on oil output curbs expires at the end of the year.
A report from the Oxford Institute of Energy Studies found the OPEC strategy could be complicated by future demand scenarios, however.
Brent hit a session low of $66.69 and US crude slumped as low as $62.06. That's far lower than the February increase in total non-farm payrolls of 313,000.
Rig count in the U.S. has gone up by 6 rigs to 990 last week, according to a report by services firm Baker Hughes. Posted as rig counts, gains or losses would have an inverse relationship on the price of oil.