Oil is firm but trade dispute keeps traders edgy

Oil inches higher

Oil prices rose on Thursday, holding onto a late-session rally the previous day, buoyed by the USA government data showing a surprise drawdown in crude stockpiles.

The price of Brent crude on Tuesday hit its highest level since December 2014, as rising tensions in the Middle East are threatening supply security in the region.

In physical oil markets, Opec's number two producer Iraq said on Monday that it was keeping prices for its crude supplies in May steady.

Those rosier forecasts from the USA government and the improved news-flow on the global trade front saw Brent futures for next month delivery rise 3.54% to $71.08 a barrel on the ICE, alongside a 3.54% move higher for WTI to $65.66 a barrel.

Brent crude futures rose $2.56 to $71.21 a barrel, a 3.7 percent gain, by 3:12 p.m. EDT.

The remarks helped soothe investor jitters over the ongoing tit-for-tat tariff dispute between the USA and China, which investors had feared might escalate into a full-blown trade war between the world's two largest economies.

"There are headlines of a USA carrier group heading to the Middle East, the Saudis are looking for $80 Brent crude, and this is ahead of API inventories", said Roberto Friedlander, head of energy trading at Seaport Global Securities.

Also supportive to crude prices was the weakness of the US dollar.

Beyond the trade dispute, oil markets are also concerned about the potential of renewed USA sanctions against some significant oil producers.

Turning to data, unofficial figures from the American Petroleum Institute suggest that both crude and gasoline stocks were higher last week (the consensus expected stocks to keep falling).

While "there is a lot of positive news for the recent move higher in oil", said Scott Gecas, senior strategic account executive at Long Leaf Trading Group, "the biggest factor to me is last week's inventory report, [which] showed a huge 4.6 million barrel decline" in US crude stocks. U.S. President Donald Trump promised a "major response" within 24 to 48 hours to an alleged chemical attack in Syria, which he said could be the work of the Syrian government, Iran, Russia or all three. "However, oil market fundamentals are tightening and oil prices looks set to be squeezed higher as long as OPEC+ sticks to its cuts".

The report comes a week after Crown Prince Mohammed first told Time magazine that he expected Aramco's public launch to coincide with higher oil prices.

JPMorgan said it expects Brent and WTI prices to average $69.50 and $65.20 per barrel in 2018, respectively, while it forecasts $64 per barrel for Brent and $58.50 per barrel for WTI in 2019.

However, soaring USA crude production, which has jumped by a quarter since mid-2016 to 10.46 million barrels per day (bpd), is threatening to undermine OPEC's efforts to tighten the market and prop up prices.

Related news:

Hot News

isis-killer-beheading-video-story-top Collins: Pruitt Is 'Wrong Person' To Lead EPA 'On Policy Grounds Alone'
Apr 10, 2018 - 20:04
Trump has praised Pruitt's relentless efforts to scrap, delay or rewrite Obama-era environmental regulations. But the White House has remained adamant in its support of Pruitt as head of the EPA.

isis-killer-beheading-video-story-top Injured F1 mechanic in Bahrain successfully undergoes surgery: Ferrari
Apr 10, 2018 - 19:53
Ferrari announced that it is now investigating as to why Raikkonen was given a green light when one wheel was yet to be changed. Scuderia Ferrari has received a hefty fine of 50,000 Euros for the incorrect pitstop during the 2018 Formula 1 Bahrain GP.

isis-killer-beheading-video-story-top Sports Chelsea vs West Ham: Conte Reacts To Disappointing 1-1 Draw
Apr 10, 2018 - 19:50
West Ham are scheduled to face off against Stoke, Arsenal, Manchester City, Leicester, Manchester United , and Everton. Rice, 19, had a starring role as the Hammers eased their relegation fears with a 1-1 draw against Chelsea.

isis-killer-beheading-video-story-top Free Beacon: Iran Threatens to Restart Nuclear Enrichment Program
Apr 10, 2018 - 19:37
On Sunday, Salehi was quoted as saying that Tehran needs only four days to ramp up its uranium enrichment at the Fordow nuclear plant, if the U.S. withdraws from the deal.

isis-killer-beheading-video-story-top IPL 2018: KKR restrict RCB to 176/7 in Kolkata
Apr 09, 2018 - 00:43
KKR did lose few wickets, but Nitish Rana (34) and skipper Dinesh Karthik fabricated a 55-run partnership to bring some stability. He ended the over with a bang, smacking a short ball for a six over mid-wicket as Woakes leaked 20 runs.

isis-killer-beheading-video-story-top Crowe nets millions from divorce auction
Apr 09, 2018 - 00:39
Crowe also parted with a collection of artwork, including the 1960 Charles Blackman work "The Suitor", which sold for $360,000. The costume he wore for that same movie wasn't far behind, sold for $115,000.

isis-killer-beheading-video-story-top CWG 2018: Manika Batra leads Women Table Tennis team for historic gold
Apr 09, 2018 - 00:38
He cleared 154 kg in snatch before creating a new Commonwealth and CWG record by lifting 216 kg in the clean and jerk . In the women's team squash semi-finals against England, India bossed England 3-0 to enter the final.

isis-killer-beheading-video-story-top Floyd Mayweather Has His Say On Conor McGregor's Crazy Antics
Apr 09, 2018 - 00:36
If Mayweather does go into an MMA fight, he said it would be weighing in at 145 pounds. "Absolutely. Only if the money is right, and the money will always be right", Mayweather said.

isis-killer-beheading-video-story-top Guardiola frustrated by City's defensive struggles after Manchester derby defeat
Apr 09, 2018 - 00:35
And they point out that both areas are close to Anfield and that fans were going to gather outside the stadium regardless. City assistant Manuel Estiarte posted footage from the bus on social media and called the incident "unacceptable".

isis-killer-beheading-video-story-top Nadal routs Zverev, Ferrer outlasts Kohlschreiber to lead Spain past Germany
Apr 09, 2018 - 00:34
Defending champions France go to Genoa to tackle Italy who are contesting their 250th Davis Cup tie. He beat Kohlschreiber in straight sets on Friday after Zverev had overcome Ferrer.

isis-killer-beheading-video-story-top Fire at Trump Tower leaves 1 man dead and 6 firefighters injured
Apr 09, 2018 - 00:32
Flames and smoke were spotted billowing and debris raining down from the 50th floor of the Trump Tower around 5:30 p.m. Brassner was unconscious and unresponsive when firefighters pulled him out, the New York Police Department said.

isis-killer-beheading-video-story-top Chelsea vs West Ham
Apr 09, 2018 - 00:31
His finish today was emphatic, as his side footed strike leaving Thibaut Courtois with absolutely no chance between the sticks. Respects paid, Chelsea had to focus on finding a way to end a damaging run of one win from their previous four league matches.

isis-killer-beheading-video-story-top Masters Bus Crash Injures at Least a Dozen on Interstate 20
Apr 08, 2018 - 01:31
COLUMBIA COUNTY, Ga (WRDW/WAGT) - Lanes on I-20 eastbound and westbound are blocked after a tour bus has overturned on I-20. The crash originally led to the closure of lanes on both sides of the interstate.

isis-killer-beheading-video-story-top DHSK celebrates World Health Day
Apr 08, 2018 - 01:22
What we need to do is to ensure that the resources are channeled in a way that will bring equitable access to essential services. The WHO's message is simple - people deserve access to healthcare without fearing financial hardships.

isis-killer-beheading-video-story-top Syrian truce collapses; offensive on rebel areas outside Damascus kills dozens
Apr 08, 2018 - 01:12
There are three warplanes in the sky and two helicopters", Firas al-Doumi, a rescue worker inside Douma, told AFP this morning. A view of Syrian Arab Red Crescent, a humanitarian non-profit organisation, personnel delivering aid in Eastern Ghouta, Syria.