Commodities: Oil prices on Wednesday

The oil sector is trying to cope with various problems. At the one hand, is the ongoing trade war between the U.S. and China, which affected the oil prices and oil industry. On the other hand, is the global economic problems as the economy is slowing down.

Another problem is the regional tensions in the Middle East as well as other regions. All of these problems together make drilling less attractive to the companies. In this situation, any positive news regarding the oil prices is a sign of relief, especially for the major oil-producing countries.

Oil prices are on the rise. On Wednesday, the price of Brent crude, as well as West Texas Intermediate (WTI), increased this happened after oil prices experienced problems on Tuesday. The price of Brent crude rose by 46 cents or 0.79% to $58.71 a barrel. Meanwhile, the price of WTI crude increased by 58 cents or 1.08% to $54.52 a barrel.

There are several factors which influence commodities. One news which had a positive impact is China’s services sector. This sector’s result in August is better than in June and July. It means that the service sector expanded faster which is good news for the Chinese economy. As the number of orders increased, it also affected the job market.

It is worth mentioning that China is the second-largest oil consumer after the U.S. At the same time, it is the biggest oil importer. These two reasons combined can affect the oil sector. The latest increase is just one example.

An Iranian oil tanker and Syria

Iranian oil tanker Adrian Darya 1 is still in the spotlight. This ship was detained in Gibraltar. This incident highlighted the problems between Iran and the West. The ship left Gibraltar after authorities made the decision not to follow the U.S decision. The name a different name before the incident but the owner changed the name and flag as well. Right now, ship sails under Iranian flag.

On September 3, Adrian Darya 1 was in the vicinity of the Syrian waters. It turned off the positioning system. U.S. State Department argued that the ship was going to unload its cargo in Syria. This was the primary reason why the State Department wanted to prolong the detention of this ship.

This is an interesting situation because Iranian authorities denied that the ship was going to Syria when it was detained in Gibraltar. They reiterated their position, and they assured Gibraltar’s authorities that ship was not going to Syria. However, yesterday the ship was close to the Syrian waters.

This fact may prove that Iranian authorities didn’t provide the correct information or even worse lied about the destination. This is not the end of the story, as two Suezmax tankers were close to the Adrian Darya 1. The third ship was also moving in the same direction. There is a chance that Adriana Darya 1 will transfer the oil by transferring it to the other ships.

Oil prices increased on September 4. As mentioned above the oil sector is in a tough position, and any small positive changes are important for the oil companies.