Oil set for weekly fall under supply pressure
Oil prices fell on Friday and were set for a weekly decline of over 2% on the back of oversupply concerns and uncertainty around tariff talks between the U.S. and China.
Brent crude futures fell 41 cents to $66.14 a barrel by 0953 GMT, falling 2.6% on the week.
U.S. West Texas Intermediate (WTI) crude fell 36 cents to $62.43 a barrel, having declined 3.5% for the week.
"On a weekly basis ... prices are down as concerns over oversupply from OPEC+ persist, while the demand outlook remains uncertain amid ongoing trade tensions. A stronger U.S. dollar has also added pressure to crude prices," LSEG senior analyst Anh Pham said.
Oil erased earlier gains after a spokesperson from China's foreign ministry said China and the United States were not having any consultations or negotiations on tariffs. That contradicted earlier comments by U.S. President Donald Trump, who said on Thursday trade talks between the U.S. and China were underway.
"Traders now view further (crude price) gains as unlikely in the short term due to the continued trade war among top global consumers and speculation that OPEC+ may accelerate production hikes from June," Saxo Bank analyst Ole Hansen said.
China has exempted some U.S. imports from its 125% tariffs and is asking firms to identify critical goods they need levy-free, according to businesses notified, in the clearest sign yet of Beijing's concerns about the trade war's economic fallout.
China hiked its tariffs after Trump announced higher levies on Chinese goods.
Oil prices tumbled earlier this month after the tariffs sparked concern about global demand and a sell-off in financial markets.
Worries are growing about excess supply. Several OPEC+ members had suggested the group accelerate oil output increases for a second month in June, Reuters reported earlier this week.
The United States and Russia are moving in the right direction to end the war in Ukraine, but some specific elements of a deal remain to be agreed, Russian Foreign Minister Sergey Lavrov said in an interview with CBS News.
A halt to Russia's war in Ukraine and the easing of sanctions could allow more Russian oil to flow to global markets. Russia, a member of the OPEC+ group that includes the Organization of the Petroleum Exporting Countries, is one of the world's biggest oil producers along with the U.S. and Saudi Arabia.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Shafaq News
3 hours ago
- Shafaq News
Oil prices keep climbing as Iran-Israel conflict enters sixth day
Shafaq News/ Oil prices rose in Asian trade on Wednesday, extending a 4% gain from the previous session on worries that the Iran-Israel conflict could disrupt supplies. Brent crude futures rose 26 cents, or 0.3%, to $76.71 a barrel by 0440 GMT. U.S. West Texas Intermediate crude futures rose 35 cents, or 0.5%, to $75.19 per barrel. U.S. President Donald Trump on Tuesday called for Iran's "unconditional surrender" as the Iran-Israel air war entered a sixth day. The U.S. military is deploying more fighter aircraft to the region to bolster its forces, three officials said on Tuesday. Analysts said the market was largely worried about supply disruptions in the Strait of Hormuz, which carries a fifth of the world's seaborne oil. Iran is OPEC's third-largest producer extracting about 3.3 million barrels per day (bpd) of crude oil, but spare capacity among producers in the Organization of the Petroleum Exporting Countries and their allies can readily cover this. "Material disruption to Iran's production or export infrastructure would add more upward pressure to prices. However, even in the unlikely event that all Iranian exports are lost, they could be replaced by spare capacity from OPEC+ producers ... around 5.7 million barrels a day," said Fitch analysts in a client note. Brent crude oil prices have gained about $10 a barrel over the past two weeks, and Fitch analysts said they expect the geopolitical risk premium in oil prices to be contained at around $5 to $10. In another sign of the market's jitters, Brent crude's premium to Middle East benchmark Dubai soared above $3 a barrel on Wednesday, market sources said, hitting its highest since late September 2023 according to LSEG data. Markets are also looking ahead to a second day of U.S. Federal Reserve discussions on Wednesday, in which the central bank is expected to leave its benchmark overnight interest rate in the 4.25%-4.50% range. However, the conflict in the Middle East and the risk of slowing global growth could push the Fed to potentially cut rates by 25 basis points in July, sooner than the current market expectation of September, said Tony Sycamore, market analyst with IG. "The situation in the Middle East could become a catalyst for the Fed to sound more dovish, as it did following the October 7, 2023, Hamas attack," Sycamore said. Lower interest rates generally boost economic growth and demand for oil. Confounding the decision for the Fed, however, is that the Middle East conflict also creates a new source of inflation via surging oil prices.
Shafaq News
4 hours ago
- Shafaq News
Gold inches lower as investors monitor Fed verdict and Israel-Iran tensions
Gold prices edged lower on Wednesday as investors refrained from making significant bets ahead of the U.S. Federal Reserve's policy decision, while keeping a close watch on escalating developments in the Israel-Iran conflict. Spot gold dipped 0.1% to $3,386.79 an ounce, as of 0805 GMT. U.S. gold futures fell 0.1% to $3,405.10. All attention is on the Fed's two-day policy meeting, which concludes later in the day. The central bank is widely expected to keep rates steady but investors will look for signals on future cuts. Investors will watch closely for Fed Chair Jerome Powell's remarks following the meeting. "Traders are holding back ahead of the Federal Reserve's interest rate decision later today, while a slight uptick in risk appetite in equity markets is weighing on gold," said Ricardo Evangelista, senior analyst at brokerage firm ActivTrades. S&P 500 futures added 0.2%, while Nasdaq futures gained about 0.3%. Meanwhile, the conflict between Israel and Iran continues to fuel geopolitical instability which is keeping a floor under the market, Evangelista added. Iran and Israel launched fresh missile strikes against each other on Wednesday, entering the sixth day of intense conflict. The U.S. is deploying more fighter aircraft to the Middle East and extending the deployment of other warplanes, three U.S. officials told Reuters. "While gold prices could feasibly fall from current levels over the next six months ... strong demand from central banks and Chinese investors – will limit any prices falls and keep gold above the $3,000 per ounce level," said Hamad Hussain, assistant climate and commodities economist at Capital Economics. Elsewhere, spot silver was flat at $37.22 per ounce, platinum rose 1.1% to $1,276.73, while palladium gained 0.1% to $1,053.25.
Iraqi News
6 hours ago
- Iraqi News
Oil stabilises after surge, stocks drop as Mideast crisis fuels jitters
Hong Kong – Oil prices stabilised Wednesday after surging the previous day on fears of a US intervention in the Israel-Iran conflict sparked by Donald Trump calling for Tehran's 'unconditional surrender'. Iran and Israel exchanged missiles for a sixth day, with the US president's latest comments appearing to dent hopes that the crisis in the Middle East could be calmed. Leaving the G7 summit in Canada a day early on Monday, Trump said he was aiming for a 'real end' to the conflict, not just a ceasefire. He later shared a series of social media posts that stoked speculation he could be planning to join Israel in its strikes on Iranian military and nuclear sites. Days after a senior US official said Trump had told Israel to back down from plans to assassinate top leader Ayatollah Ali Khamenei, the US president looked to reverse course. 'We know exactly where the so-called 'Supreme Leader' is hiding. He is an easy target, but is safe there — We are not going to take him out (kill!), at least not for now,' he wrote on his Truth Social platform. Warning Iran against targeting US interests, he also posted: 'But we don't want missiles shot at civilians, or American soldiers. Our patience is wearing thin.' And in a later post wrote: 'UNCONDITIONAL SURRENDER!' The comments sent oil prices spiking more than four percent Tuesday on fears an escalation of the conflict could hammer supplies from the crude-rich region. But while both main contracts dipped Wednesday, investors remain on edge over any negative developments. Of particular concern is the possibility of Iran shutting off the Strait of Hormuz, through which around an estimated fifth of global oil supply traverses, according to the Commerzbank note. 'Iran is reportedly ready to target US regional bases should Trump greenlight strikes on Iranian nuclear facilities,' said Stephen Innes at SPI Asset Management. 'Washington's refuelling jets are already en route, and if Fordow gets hit, expect the Strait of Hormuz to become a maritime minefield, Houthi drones to swarm Red Sea shipping lanes, and every militia from Basra to Damascus to light up American forward outposts.' Markets Hong Kong, Shanghai, Seoul, Singapore, Sydney, Wellington, Manila and Jakarta all sank, though Tokyo, Seoul and Taipei edged up. The losses followed a weak day on Wall Street, where a below-forecast reading on US retail sales for May — dragged by a slowdown in auto sales — revived fresh worries about the world's top economy. That came as another report showed factory output fell unexpectedly. Still, they did provide a little hope the Federal Reserve will eventually cut interest rates, with traders betting on two by the end of the year, according to Bloomberg News. Investors will be keeping track of the bank's latest meeting as it concludes later in the day, with most observers predicting it will stand pat. However, it is also due to release its rate and economic growth outlook for the rest of the year, which are expected to take account of the impact of Trump's tariff war. 'The Fed would no doubt be cutting again by now if not for the uncertainty regarding tariffs and a recent escalation of tensions in the Middle East,' said KPMG senior economist Benjamin Shoesmith. – Key figures at around 0230 GMT – West Texas Intermediate: FLAT at $74.83 per barrel Brent North Sea Crude: DOWN 0.1 percent at $76.37 per barrel Tokyo – Nikkei 225: UP 0.7 percent at 38,791.80 (break) Hong Kong – Hang Seng Index: DOWN 1.3 percent at 23,680.69 Shanghai – Composite: DOWN 0.4 percent at 3,373.49 Euro/dollar: UP at $1.1498 from $1.1488 on Tuesday Pound/dollar: UP at $1.3434 from $1.3425 Dollar/yen: DOWN at 145.15 yen from 145.27 yen Euro/pound: UP at 85.58 pence from 85.54 pence New York – Dow: DOWN 0.7 percent at 42,215.80 (close) London – FTSE 100: DOWN 0.5 percent at 8,834.03 (close)
