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Oil falls on global demand slowdown fears  

Oil falls on global demand slowdown fears  

Mubasher: Oil prices declined on Friday amid looming risks from global economic growth and sluggish demand, even with signals of progress on US-China trade talks, paving the way for weekly losses, according to Reuters.

By 8:33 am GMT, US Nymex crude futures fell by 0.29% at $54.93 per barrel, while global benchmark Brent futures dropped by 0.38% at $60.15 pb.

Nymex was on course for its first weekly loss since three weeks, while Brent was heading for its first weekly fall in five.

Pledges by members of the Organization of the Petroleum Exporting Countries (OPEC) to scale back production were muted by investor worries about the impact of the protracted trade conflict between Washington and Beijing on global economic growth.

“Again it is a battle between the forces of OPEC and those of slowing global growth and thus demand,” McKenna Macro strategist Greg McKenna was quoted by Reuters.

Economists polled by the news agency pointed to the weak sentiment in the markets, projecting that the trade tensions between the world’s biggest two economies would worsen or remain the same.

However, US President Donald Trump on Thursday hinted the possibility of an interim deal with Beijing on trade, despite would like to ink a full pact.

President Trump’s remarks were welcome news for Asian markets which saw a rally during Friday trade, along with aggressive stimulus from the European Central Bank (ECB), all of which mitigated fear of a global economic slowdown.

Nevertheless, concerns among oil traders over whether the US and China could make any progress overshadowed hopes raised by OPEC’s agreement on Thursday to slash the number of produced crude barrels, after Nigeria and Iraq pledged to lower their output in line with agreed targets.

“Trade tensions and reduced risk of tougher sanctions on Iran and Venezuela will limit the upside,” ANZ Research was quoted by Reuters.

As the trade tensions were taking a heavy toll on shipping businesses, due to slower inflows of goods and commodities, the result will be softer oil demand growth from the shipping sector next year than previously predicted, even with a shift towards cleaner energy, the International Energy Agency said on Thursday.