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Oil Prices Drop on Demand Worries; U.S.-China to Restart Talks

Published 04/07/2019, 12:37
Updated 04/07/2019, 12:54
© Reuters.
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Investing.com – Oil prices moved lower in early morning trade on Thursday as demand worries continued to exert downward pressure on the sector. Trading was expected to be thin due to the Fourth of July holiday in the U.S.

U.S. crude oil futures fell 33 cents, or 0.6%, to $57.01 at 7:28 AM ET (11:28 GMT), while Brent oil traded down, 9 cents, or 0.1%, to $62.73.

Weekly data from the U.S. Energy Information Administration showed a much smaller than expected decline in U.S. crude inventories, casting doubt on demand despite it being in the middle of the U.S. driving season.

“We have uncertainty, especially on the demand side, while supply has been capped at least by OPEC and Russia for another nine months, but U.S. production continues to go up,” Ole Hansen, head of commodity strategy at Saxo Bank, commented on the report in Macro Voice’s latest Energy Week episode.

Hansen said that markets are seeing both long and short positions being cut back and that reflects “extreme levels of confusion as to where we go next”.

“This market is not going anywhere fast in the near future, adopting an increased wait-and-see (approach) and trying to stay alive within this relatively wide range that we’re currently seeing,” he concluded.

Perhaps adding to that lack of movement, the trade truce between the U.S. and China did little to resolve concerns that an actual deal will be forthcoming.

Markets are concerned that the dispute is adding to the global downturn, dampening demand for oil.

Although White House Economic Adviser Larry Kudlow said the bilateral talks between both sides top negotiators would resume next week, he had few further details to add.

“I don't know precisely when. They're on the phone. They're going to be on the phone this coming week and they'll be scheduling face-to-face meetings," he said in a briefing late Wednesday.

Investing.com – Oil prices moved lower in early morning trade on Thursday as demand worries continued to exert downward pressure on the sector. Trading was expected to be thin due to the Fourth of July holiday in the U.S.

Investing.com – Oil prices moved lower in early morning trade on Thursday as demand worries continued to exert downward pressure on the sector. Trading was expected to be thin due to the Fourth of July holiday in the U.S.

U.S. crude oil futures fell 33 cents, or 0.6%, to $57.01 at 7:28 AM ET (11:28 GMT), while Brent oil traded down, 9 cents, or 0.1%, to $62.73.

Weekly data from the U.S. Energy Information Administration showed a much smaller than expected decline in U.S. crude inventories, casting doubt on demand despite it being in the middle of the U.S. driving season.

“We have uncertainty, especially on the demand side, while supply has been capped at least by OPEC and Russia for another nine months, but U.S. production continues to go up,” Ole Hansen, head of commodity strategy at Saxo Bank, commented on the report in Macro Voice’s latest Energy Week episode.

Hansen said that markets are seeing both long and short positions being cut back and that reflects “extreme levels of confusion as to where we go next”.

“This market is not going anywhere fast in the near future, adopting an increased wait-and-see (approach) and trying to stay alive within this relatively wide range that we’re currently seeing,” he concluded.

Perhaps adding to that lack of movement, the trade truce between the U.S. and China did little to resolve concerns that an actual deal will be forthcoming.

Although White House Economic Adviser Larry Kudlow said the bilateral talks between both sides top negotiators would resume next week, he had few further details to add.

Markets are concerned that the dispute is adding to the global downturn, dampening demand for oil.

Although White House Economic Adviser Larry Kudlow said the bilateral talks between both sides top negotiators would resume next week, he had few further details to add.

“I don't know precisely when. They're on the phone. They're going to be on the phone this coming week and they'll be scheduling face-to-face meetings," he said in a briefing late Wednesday.

U.S. crude oil futures fell 33 cents, or 0.6%, to $57.01 at 7:28 AM ET (11:28 GMT), while Brent oil traded down, 9 cents, or 0.1%, to $62.73.

Weekly data from the U.S. Energy Information Administration showed a much smaller than expected decline in U.S. crude inventories, casting doubt on demand despite it being in the middle of the U.S. driving season.

“We have uncertainty, especially on the demand side, while supply has been capped at least by OPEC and Russia for another nine months, but U.S. production continues to go up,” Ole Hansen, head of commodity strategy at Saxo Bank, commented on the report in Macro Voice’s latest Energy Week episode.

Hansen said that markets are seeing both long and short positions being cut back and that reflects “extreme levels of confusion as to where we go next”.

“This market is not going anywhere fast in the near future, adopting an increased wait-and-see (approach) and trying to stay alive within this relatively wide range that we’re currently seeing,” he concluded.

Perhaps adding to that lack of movement, the trade truce between the U.S. and China did little to resolve concerns that an actual deal will be forthcoming.

Markets are concerned that the dispute is adding to the global downturn, dampening demand for oil.

“I don't know precisely when. They're on the phone. They're going to be on the phone this coming week and they'll be scheduling face-to-face meetings," he said in a briefing late Wednesday.

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