Oil Prices Rise on Positive Trade Development, Falling Crude Stockpiles

Andrew Cummings
September 12, 2019

"The installation of the necessary pipelines and terminals is continuing apace, which will ensure that the trend continues".

Surging output from shale helped America ship nearly 9 million barrels a day of crude and oil products in June, surpassing Saudi Arabia, the International Energy Agency said in a report, citing gross export figures.

US crude stocks have fallen almost 22 million barrels in a span of just three weeks, with the draws coming unusually at the tail end of summer, when driving activity in the U.S.is typically on the decline. Estimates are based on preliminary data from direct communication for non-OPEC supply, OPEC NGLs and non-conventional oil, while estimates for OPEC crude production are based on secondary sources. While Saudi Arabia has slashed production well below its quota under the output-cut agreement, not all producers have been as compliant.

Overnight, U.S. President Donald Trump said in a tweet that he will be postponing the imposition of 5% extra tariffs on Chinese goods by two weeks "as a gesture of good will". Oil prices have been racked by the market volatility due to fears of easing global demand due to the U.S.

"And whatever happens to the world price of oil, whatever happens to the world price of whatever, electricity, it doesn't really matter, then so be it", Dan Brouillette said.

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading lower on Thursday after a steep sell-off was triggered the previous session by a report that President Trump weighed easing sanctions on Iran, which could raise global crude supply at a time when producers are anxious about lower global demand growth. Analysts were looking for a 1.4 million barrel draw in gasoline and a 220,000 barrel rise in distillate supplies.

Brent crude futures rose 45 cents, or 0.7%, to $61.26 a barrel by 0504 GMT, while U.S. West Texas Intermediate (WTI) futures gained 50 cents, or 0.9%, to $56.25 a barrel. It also suggests next year there will be a larger daily surplus of oil production.

"In August, Baghdad reported its highest oil production on record at 4.6 million barrels per day (BPD), a volume that has increased steadily over the past few years despite almost two decades of war and a bloody three-year battle to drive out the so-called Islamic State (IS)", reports CNBC.

"For second half 2019, we assume no further deterioration in the economic climate and in trade disputes", it said.

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