- Oil Heads for Rise as Traders Eye Iran, China
Oil futures climbed yesterday, on track for a three-day winning streak, with United States (U.S.) sanctions on Iran contributing to concerns over tighter global oil supplies. Trade tension between the U.S. and China is however dulling demand outlook.
The global benchmark, October Brent crude LCOV8, +0.68 per cent rose 49 cents, or 0.7per cent, to $72.32 a barrel on the ICE Futures Europe exchange. Brent logged a 1.3 per cent weekly loss at the weekend.
West Texas Intermediate crude for September delivery CLU8, +0.61 per cent on the New York Mercantile Exchange was up 27 cents, or 0.4 per cent, at $66.18 a barrel following gains over the past two sessions. The contract, which expires at the end of Tuesday’s session, logged a 2.5per cent decline last week.
Emerging-market and Chinese demand worries had rippled through the market last week, sending oil prices down for a third week in a row.
A surprise jump in U.S. crude inventories last week also nicked prices, while overall strength in the U.S. dollar underlined concerns about global energy demand, sending prices lower. Still, late-week relief came the bulls’ way on news the U.S. and China prepared to resume trade talks, though expectations for a breakthrough remained low.
Fears of broader damage to emerging markets as a result of Turkey’s currency crisis sent shock waves through commodity markets last week, led by a selloff for industrial metals. The ICE U.S. Dollar Index DXY, -0.20 per cent which measures the U.S. unit against a basket of six major rivals, hit a 14-month high last week on haven-related demand.
The emerging-market worries were compounded by signs of slower growth in China, where the trade dispute with the U.S. has dimmed the economic outlook for the world’s second-largest economy and its thirst for oil.
