Oil posted its biggest loss of the year last week as the intensifying trade war caused investors to reassess their outlook.
Oil held gains above $58 a barrel after American explorers reduced drilling activity to the least in more than a year, providing some respite from a demand outlook thrown into doubt by the US-China trade war.
Oil posted its biggest loss of the year last week – including a 5.7% drop on Thursday – as the intensifying trade war caused investors to reassess their outlook for the global economy. Even before the plunge, money managers had reduced bullish bets on West Texas Intermediate to the lowest in two months. Meanwhile, the situation in the Middle East remained tense but didn’t worsen, allaying fears that crude shipments would be disrupted.
West Texas Intermediate (WTI) crude for July delivery fell 24 cents, or 0.4%, to $58.39 a barrel on the New York Mercantile Exchange at 12:37 pm in Singapore after rising as much as 0.7% earlier. The contract closed 72 cents higher on Friday, paring its loss for the week to 6.6%.
The number of working US rigs fell by five to 797 last week, according to the Baker Hughes data, showing a slowdown in activity in the prolific Permian shale basin. Fears of any immediate disruptions to global supplies have been alleviated by several days of relative calm in the Middle East. Still, a steadily-deteriorating situation in Venezuela and output risks from Libya to Nigeria are keeping the supply backdrop tight.