Mubasher: Oil prices edged up on Friday amidst an expected output cut from the Organization of the Petroleum Exporting Countries (OPEC), which lent some support, Reuters reported.
Nevertheless, gains were limited by worries about a protracted trade conflict between the US and China, the world’s biggest two oil consumers.
By 8:09 am GMT, US Nymex crude futures and global benchmark Brent futures both rose by 0.19% to $52.64 per barrel (pb) and $57.49 pb, respectively.
Both contracts made a leap of more than 2% on Thursday to recover from their lowest levels since last January, helped by reports that Saudi Arabia called upon other exporters to hold talks about the recent crash in oil prices.
Saudi Arabia, OPEC’s de-facto leader, planned to keep its oil exports below 7 million barrels per day (bpd) in August and September to get the market back on an even keel and help clear a build-up in global crude stockpiles, a Saudi official was cited by Reuters.
Moreover, the UAE, another OPEC producer, would maintain support for actions to return market to balance, the Gulf nation’s Energy Minister Suhail al-Mazrouei said in a tweet on Thursday.
In addition, a meeting by OPEC and non-OPEC ministerial monitoring committee is due to be held in Abu Dhabi on 12 September, in which the oil market would be reviewed.
However, oil futures still dropped by more than 20% from highs recorded last April, placing the commodity in bearish area.
Global financial markets have been roiled during the last week, after US President Donald Trump announced that he would slap additional $300 billion worth of Chinese goods with a 10% tariff as from next month, while a slump of the Chinese yuan (CNY) stoked worries of a currency war.
“The tentative oil rebound could be short-lived as the US-China trade dispute is providing no real reasons to be optimistic,” said Edward Moya, senior market analyst at Oanda in New York.
Further exacerbating the situation, Washington was postponing a decision on granting licenses for US firms to resume business with Chinese telecoms giant Huawei, as reported by Bloomberg.
