Commodities

Oil rises for first day in 3 on OPEC output cut

2019-10-09 10:49:08 GMT (Economies.com)

Oil prices rose as the European market opened today, for the first time in 3 days, on a sharp decline in OPEC output to the 16-year low according to the short-term energy outlook report by the EIA, while these gains are being curbed by the mounting concerns about the US-China trade talks in addition to a rise in US crude inventories according to API preliminary data.

 

WTI rose to $53.04 a barrel, from the opening of $52.55, with a session-low of $52.35.

 

Brent rose to $58.60 a barrel, from the opening of $57.96, with a low of $57.93.

 

WTI closed lower by 0.45% yesterday, and Brent futures also fell by 0.5%, their second daily loss on the escalating trade tensions between the world's two largest economies.

 

The US Energy Information Administration (EIA) showed in the report that OPEC output declined to 28.2 million barrels per day in September, lower by 1.6 million bpd from August, the lowest since November 2003 as a result of supply disruptions in Saudi Arabia.

 

Additionally, a monthly Reuters survey showed last week that OPEC production slumped to 8-year low in September, losing around 750,000 barrels per day to a total of 28.9 million.

 

A new round of the US-China trade talks will launch on next Thursday in Washington, DC, in attempts to end the ongoing raging trade war between the world's two largest economies.

 

Hopes for the US-China trade talks ebbed after the US Commerce Department blacklisted 28 Chinese companies and government agencies over Beijing’s treatment of Uighurs Muslims and other predominantly Muslim ethnic minorities.

 

The American Petroleum Institute (API) revealed yesterday in preliminary data that the US oil inventories rose by 4.1 million barrels during the week that ended in October 4, its third straight weekly rise, beating forecasts of a rise by 1.4 million barrels.

 

While the official inventories data will be released later today, in the US Energy Information Administration's weekly report, with forecasts of a rise by 1.8 million barrels for the fourth week.

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