Oil bulls looking for a respite from last week’s sell-off were left disappointed as crude remained under pressure on Monday, with both Brent and the West Texas Intermediate down more than 3.5 percent on supply worries.
According to an FT report, Brent shed $2.89, or 3.8 percent, to trade at a four-week low of $72.43 a barrel while WTI dropped by a similar amount to $68.48, its weakest level since June 26.
After hitting a three-year high at the start of the month, oil has been in retreat amid a fresh escalation in the US’s trade dispute with the rest of the world. Concerns that the tit-for-tat tariff war could put the brakes on global growth — and by extension demand for oil — was further exacerbated on Monday by data showing China grew at its slowest pace since 2016 in the second quarter.
All this is coming amid growing signs that more supplies could be coming on to the market after Libya last week moved to reopen four key export terminals and following reports that the US is considering releasing emergency oil reserves ahead of the November midterm to counteract the higher prices that Americans have been seeing at the pumps.
Elsewhere Saudi Arabia is also showing signs of heeding President Donald Trump’s call for Opec to rein in prices with Bloomberg reporting that the kingdom is offering extra crude volumes on top of its contractual supplies to some buyers in Asia.
President Trump has been hitting out at higher oil prices in recent weeks, accusing accused OPEC of ‘manipulating’ oil markets and keeping prices ‘artificially’ high.
Despite the poor start to July, oil prices are still up some 50 percent over the past 12 months.
Frontpage February 15, 2021