Oil slips further from 2019 highs on demand worries
Oil fell about 2 percent on Friday, slipping further from 2019 highs as focus shifted to a lack of progress in U.S.-China trade talks and as grim manufacturing data from Germany and the U.S. reignited fears of a slowdown in the global economy and oil demand.
Wall Street`s main indexes tumbled about 2 percent on Friday after manufacturers in Europe, Japan and the United States suffered in March as surveys showed trade tensions had impacted factory output, a setback for hopes the global economy might be turning the corner on its slowdown.
Brent crude futures were at $66.41 per barrel at 1:09 p.m. ET (1709 GMT), $1.45, or 2.1 percent below their last close and down about 1 percent on the week. The contract hit a four-month high of $68.69 on Thursday.
The global benchmark has risen by more than 20 percent since the beginning of January, due to supply cuts by the Organization of the Petroleum Exporting Countries and allies, such as Russia, and U.S. sanctions on Iran and Venezuela.
U.S. West Texas Intermediate (WTI) futures were down $1.39, or 2.3 percent, at $58.59 per barrel. WTI marked a 2019 peak on Thursday at $60.39 and is roughly flat on the week.
"Today`s disappointing PMI data out of Germany and France spurred further dollar gains while, at the same time, compressing global risk appetite," said Jim Ritterbusch, president of Ritterbusch and Associates.
The U.S. dollar climbed against the euro on Friday to its highest in more than a week. A strong dollar makes oil more expensive for holders of other currencies.
"The fact that these macro factors are able to offset the price impact of an exceptional bullish EIA report attests to the fragility of this three month bull move in oil."
The U.S. Energy Information Administration data on Wednesday showed that stockpiles last week fell by nearly 10 million barrels, the most since July, thanks to strong export and refining demand.
As economic growth has slowed across Asia, Europe and North America, potentially denting fuel consumption, no breakthrough has emerged in the trade stand-off between Washington and Beijing, at least before meetings scheduled on March 28-29.
Trade negotiations with China were progressing and a final agreement "will probably happen," U.S. President Donald Trump said in a television interview aired on Friday.
Three in four Japanese companies expect U.S.-China trade frictions to last until at least late this year, a Reuters poll found.
A jump of more than 2 million barrels per day in U.S. crude oil production since early 2018 to a record 12.1 million bpd has made the United States the world`s biggest producer, ahead of Russia and Saudi Arabia.
This has resulted in increasing exports, which have doubled over the past year to more than 3 million bpd. The International Energy Agency estimated that the United States would become a net crude oil exporter by 2021.
U.S. energy firms this week reduced the number of oil rigs operating for a fifth week in a row, cutting nine rigs to the lowest count in nearly a year as independent producers follow through on plans to cut spending with the government cutting its growth forecasts for shale output.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.