LONDON: Oil markets stabilised on Monday after having lost around 2 per cent last Friday as concerns grew over the impact on global growth from an intensifying trade dispute between the United States and China, as well as increased US drilling activity.
Markets were also eying the situation in Syria after reports — denied by the Pentagon — that US forces had struck a major air base there.
Brent crude futures were up 39 cents on the day at $67.50 a barrel by 0912 GMT. The price approached its lowest in three weeks last week.
US WTI crude futures were up 25 cents at $62.31 a barrel.
Oil prices fell about 2 per cent on Friday after US President Donald Trump threatened new tariffs on China, reigniting fears of a trade war between the world’s two largest economies that could hurt global growth.
“The market is currently concerned for the escalating China-US trade war tensions. And with good reason since this will be bad for global growth and oil demand growth further down the road,” said Bjarne Schieldrop, head of commodity strategy at SEB. “However, oil market fundamentals are tightening and oil prices looks set to be squeezed higher as long as Opec+ sticks to its cuts.”
Oil prices are still showing a gain so far this year, thanks to healthy demand and by supply restraint led by the Organization of the Petroleum Exporting Countries, which started in 2017 to rein in oversupply and prop up prices.
With Chinese markets closed last Thursday and Friday, Shanghai crude futures played catch-up on Monday, dropping 0.2 per cent to around 401.4 yuan ($63.73) per barrel. — Reuters
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