Last Friday, oil prices declined even lower as the hopes for U.S. – China trade start to get blurry.
Benchmark Brent crude oil futures LCOc1 was only able to settle for $59.42 per barrel, which was 49 cents short. On the other hand, the same thing happened with U.S. West Texas Intermediate (WTI) crude CLc1 futures as they settle with $53.78 per barrel, which was short of 15 cents.
For the current week, Brent lost 1.8%, and WTI fell by 1.8%.
The Chinese economy experiences slow growth shown by the 6% decline in the year-on-year of the third quarter. This has been their weakest rate in 27 and a half years, caused by the lack of expectations and the ongoing tensions with USA with regards to the trades.
However, the refinery throughput of China last September experienced a 9.4% increase. This served as a sign that the petroleum demand is still high in the midst of trade war with the USA. China remains to be the “world’s biggest oil importer.”
Secretary Steven Mnuchin of the U.S. Treasury stated last Wednesday that negotiators from the two countries are working to find a suitable trade deal that will be signed by their next presidents.
The president of Ritterbusch and Associates, Jim Ritterbusch, said that the world has been watching what happens to the trade negotiations between U.S. and China so much that other concerns related to trade “have been pushed to the sidelines.”
The current dispute has only increased the worries that experts are having about a possible global recession, which will affect oil demand in the market.
According to the operator Ineos from the Forties oil and gas pipeline system (FPS) emerging from the British North Sea, they have already reopened since their operations have been halted due to power surges caused by lightning strikes.
The FPS is responsible for transporting crude oil to the Brent Benchmark and is the latter’s most significant contributor.
This week, many energy firms from the U.S. have increased their functional oil rigs twice consecutively since June. According to Baker Hughes from the General Electric (GE. N), the total number of the oil rigs operational this week has increased to 713.
The committee responsible for the monitoring of global production of oil pacts found out that the “compliance is being exceeded” by the Organization of the Petroleum Exporting Countries (OPEC) and their partners. According to sources, this has caused the September cuts to represent 236% of the agreed quotas.