Oil on Friday halted a two-week losing streak as trade tensions between the US and China showed signs of easing, soothing a volatile market focused on the economic growth that underpins crude demand.
Futures rose 0.7 percent in New York. The gain capped a tumultuous week of seesawing geopolitical indicators and conflicting supply forecasts.
The protracted trade deadlock between the world’s two largest economies showed signs of breaking after US President Donald Trump predicted that he would speak “very soon” with Chinese President Xi Jinping (習近平).
“There was some relieving of trade tensions this week, so I think there’s a bit of optimism in the market,” RJO Futures senior market strategist Phil Streible said. “But many people are still bearish on crude. It will take a deal in writing between the two countries to change the dynamic in market.”
Despite the weekly gain, oil was still down 6.3 percent this month. Saudi Arabia’s pledge to curb crude exports has done little to bump prices higher.
A second weekly surprise increase in US crude inventories compounded demand fears after weak economic data from the biggest economies of Europe and Asia stoked negative sentiment.
Meanwhile, OPEC warned that oil markets face a “somewhat bearish” outlook, despite tightening supplies.
“The yo-yoing on the oil market continues and the oil price remains highly prone to fluctuations,” Commerzbank AG head of commodities research Eugen Weinberg said in Frankfurt, Germany.
“The oil price currently remains at the mercy of expectations for the global economy, and is thus caught between economic concerns and hopes that the trade dispute might end soon,” Weinberg said.
West Texas Intermediate crude for delivery next month gained US$0.40 to settle at US$54.87 per barrel at on the New York Mercantile Exchange.
Brent for October settlement added US$0.41 to US$58.64 on the ICE Futures Europe Exchange. The global benchmark traded at a US$3.83 premium to West Texas Intermediate for the same month.
In other energy trading, wholesale gasoline rose US$0.02 to US$1.66 per gallon and heating oil was unchanged at US$1.81 per gallon, while natural gas fell US$0.03 to US$2.20 per 1,000 cubic feet.
Gold fell US$7.10 to US$1,512.50 per ounce and silver fell US$0.09 to US$17.10 per ounce, while copper was unchanged at US$2.59 per pound.
Additional reporting by AP
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