Oil prices steady after recent decline, trade deal and United States inventories eyed

Oil Price Chart Forecast Technical Analysis

Oil Price Chart Forecast Technical Analysis

"Oil is likely to keep treading water for a little while in our view with the de-escalation of US-Iran tensions and consequent decline in the perception of potential future supply disruptions", global oil strategist at BNP Paribas in London Harry Tchilinguirian told the Reuters Global Oil Forum.

Oil prices were supported ahead of the signing at the White House on Wednesday of a Phase 1 U.S.

WTI (oil futures on NYMEX) is trying hard to extend the recovery from six-week lows of $57.75 reached over the last hour, having regained the 58 handle, at the time of writing.

Brent crude LCOc1 gained 65 cents to $64.85 per barrel by 1311 GMT.

Global benchmark Brent touched $US71.75 per barrel last week before ending on Friday below $US65.

The eighteen-month trade spat according to experts has disrupted global economic growth which has dampened demand for oil among consumers.

"Oil prices are tentatively rebounding after seller exhaustion kicked in as investors await the next developments on the trade front and as earnings season begins". "In case of a trade deal upward revisions can be anticipated", Varga said.

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"There is a continuing sense that the geopolitical risk from Iran has come down dramatically", said Phil Flynn, a senior market analyst at Price Futures Group Inc.

Regardless of trade wars, China's crude oil imports in 2019 surged 9.5% from a year earlier, setting a record for a 17th straight year, as demand growth from refineries built last year propelled purchases by the world's top importer, data showed.

Both benchmarks pared gains in post-settlement trading as data from the American Petroleum Institute (API), an industry group, indicated that USA crude stockpiles increased unexpectedly last week.

The recent declines came as investors unwound bullish positions built after the recent killing of a senior Iranian general in a USA air strike which sent oil prices to a four-month high earlier this month, said Harry Tchilinguirian, global oil strategist at BNP Paribas in London.

The poll was conducted ahead of reports from the American Petroleum Institute (API), an industry group, on Tuesday, and the Energy Information Administration on Wednesday. But they slumped again as Washington and Tehran retreated from the brink of direct conflict last week.

However, the team thinks Iran will continue its affront through a low intensity strategy and expect this to involve indirect attacks in the region, although it is clear markets will need to see sizable sustained production disruptions in order to bake in longer- lasting geopolitical risk premiums.

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