- Oil Prices Rise on Trade Comments
Crude oil prices rose on Monday after the US President said the US and Chinese representatives are discussing how to address the ongoing trade dispute.
While the president said the Chinese would have to bring more to the table, he also seems to agree that the two nations need each other to avert global slowdown and possible recession.
Brent crude oil, against which Nigerian oil is measured, gained 1 percent or 59 cents to $59.24 a barrel on Monday, while the U.S West Texas Intermediate rose 1.1 percent or 62 cents to $55.49 barrel.
Still, global uncertainty remains high, especially after Yemen’s Houthi group attacked Saudi Arabia oilfield on Saturday.
“The oil market seems to be pricing in again a geopolitical risk premium following the weekend drone attacks on Saudi Arabia, but the premium might not sustain if it does not result in any supply disruptions,” said Giovanni Staunovo, oil analyst for UBS.
However, the gain recorded in crude oil prices is largely due to President Trump’s positive comments on the trade deal. China is the world’s largest importer of crude oil, any positive comment on trade automatically boost oil outlook.
Meanwhile, OPEC has lowered its global oil demand for 2019 by 40,000 barrels per day to 1.10 million bpd.
Experts agreed that it is rare for the cartel to admit bearish forward view.
Therefore, “such a bearish prognosis will heap more pressure on OPEC to take further measures to support the market,” said Stephen Brennock of oil broker PVM.
Nigerian crude oil output rose by 8 percent in July to 1.95 million bpd, according to OPEC’s monthly report for August.
