Saudi Arabian Oil Price Fixed Despite Rising Crude Inventory
Saudi Arabian oil remained despite increasing crude inventories and intensifying China-U.S. trade tensions.
Crude oil WTI Futures rose up 0.1% to $55.38. Also, International Brent Oil Futures changed a bit at $60.86.
U.S. oil inventories surged sharply last week, according to a survey from the American Petroleum Institute released overnight.
The API forecasts that crude inventories increase by around 6 million barrels for the week ended Nov. 15.
Analysts are anticipating that the U.S. Energy Information Administration’s weekly inventory data to show a decline of 0.7 million barrels in crude stocks.
Oil prices were under pressure and declined as much as 3% before the release of the report. Also, U.S. President Trump warned to increase tariffs on Chinese products even further if Beijing does not sign a phase one deal.
Weighing on prices, the Reuters report said Russia is unlikely to agree to deeper cuts in oil production at a meeting with fellow exporters next month. However, it could extend existing cuts to support Saudi Arabia, the reports said.
An analyst at brokerage OANDA said oil is also feeling heavy. This is after the Russians warned they are unlikely to agree on deepening oil output cuts at the December OPEC+ meeting.
Moreover, the API data also showed U.S. inventories posted a rather booming increase last week. If this EIA report confirmed this, they could see oil prices continue to increase.
Knock-on effects from the trade war have felt in other industrialized economies.
Japanese exports dropped at their quickest pace in three years in October. It threatens to tip the trade-reliant economy into a downturn because of weakening demand from the U.S. and China.
Crude imports to Japan dropped 1.3% in October compared to the same month a year ago.
Saudi Arabian Oil Prices steady after Two-Day Decrease
Saudi Arabian oil was stable as an increase in U.S. stockpiles’ concerns about lifeless world economic growth amid the trade war.
West Texas Intermediate (WTI) crude futures surged 11 cents, or 0.2%, to $55.32 a barrel after declining 4.3% during the recent two sessions.
Brent crude futures were at $60.93 a barrel, rose 2 cents, or 0.03%. Also, Brent decreased by 3.8% during the prior two sessions.
The U.S. crude inventories increased 6 million barrels to 445.9 million while the expectation of analysts will rise by 1.5 million barrels, according to the API data.
The rise in inventories in the U.S. added to concerns about a crude oversupply. This is after reports that Russia was unlikely to back increasing output cuts when the OPEC meet on Dec. 5-6 in Vienna.
Russia and other oil producers agreed with OPEC to decline 1.2 million bpd of output through March to boost prices, according to OPEC+.
Official U.S. government inventory data from the EIA is due today.
Furthermore, U.S. crude demand slowed amid its protracted trade war with China. Hopes for an end to the tension in the signing of phase one deal dimmed amid a dispute over the removal of tariffs each side enacted.
U.S. President Trump said that the U.S. would increase tariffs on Chinese imports if there is no deal with Beijing to end the war.