Oil prices recover some ground, but economic concerns weigh

Oil prices steady set for weekly gain

Oil prices steady set for weekly gain

Brent crude was up 15 cents, or 0.26%, at $58.41 a barrel by 0850 GMT, while U.S. West Texas Intermediate futures gained 24 cents, or 0.44%, at $54.18 a barrel.

Brent crude LCOc1 futures lost 92 cents, or 1.6%, to $57.74 a barrel. On Sunday, September 1, the USA imposed tariffs on Chinese goods, and China imposed tariffs on some US goods, although Beijing left most of the tariffs for the December round of new tariffs.

While a ratcheting up of trade tensions between Washington and Beijing had been weighing on to investors' confidence, both USA and United Kingdom crude opened Tuesday's (September 3rd) market in an offbeat note, but both crude futures' prices extended losses after release of U.S. manufacturing data displaying its first contraction in more than three years. Trump tweeted that China will have a much tougher time securing a trade deal if the Asian nation waits until after the 2020 USA presidential election and he wins.

"Next year the curtailment of demand growth coming from lower GDP (gross domestic product) growth expectations and continuation of the US-China trade war could shave more oil demand from the market", its analysts said. -China trade dispute, central bank data showed on Tuesday.The move on Sunday by Argentina to impose capital controls is also casting a spotlight on emerging market risks.

Elsewhere, South Korea's economy expanded less than expected in the second quarter, with exports revised down in the face of the U.S.

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Oil prices have fallen around 20% since a 2019 peak reached in April, hit by concerns the trade war would dent oil demand.

Trump sought to prod China into doing a trade deal before the presidential election next year as the two sides struggled to agree on the schedule for a planned meeting later this month.

In broader markets, USA equity-index futures rallied alongside European and Asian stocks on Wednesday as traders cheered a easing in political tensions from Rome and London to Hong Kong.

On the supply side, Venezuela's oil exports fell in August to their lowest in 2019, internal reports and Refinitiv Eikon data showed, following tougher USA sanctions. "What's bad for the outlook for global growth is bad for oil at the moment and only big draws in inventories can delay that drift lower", said Greg McKenna, strategist at Mckenna Macro.Data due this week on U.S. inventory levels will be delayed by a day to Wednesday and Thursday due to the U.S. Labor Day holiday on Monday.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. It is not a solicitation to make any exchange in commodities, securities or other financial instruments.

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