[NEW YORK] Oil prices eased on Friday (Jul 25) and settled at a three-week low as traders worried about negative economic news from the US and China and signs of growing supply.
Losses were limited by optimism US trade deals could boost global economic growth and oil demand in the future.
Brent crude futures fell 74 US cents, or 1.1 per cent, to settle at US$68.44, while US West Texas Intermediate (WTI) crude fell 87 US cents, or 1.3 per cent, to settle at US$65.16.
Those were the lowest settlement levels for Brent since Jul 4 and WTI since Jun 30.
For the week, Brent was down about 1 per cent with WTI down about 3 per cent.
European Commission President Ursula von der Leyen will meet US President Donald Trump on Sunday in Scotland. European Union officials and diplomats said they expected to reach a framework trade deal this weekend.
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The euro zone economy has remained resilient to the pervasive uncertainty caused by a global trade war, a slew of data showed on Friday, even as European Central Bank policymakers appeared to temper market bets on no more rate cuts.
In the US, new orders for US-manufactured capital goods unexpectedly fell in June while shipments of those products increased moderately, suggesting business spending on equipment slowed considerably in the second quarter.
Trump said he had a good meeting with Federal Reserve chair Jerome Powell and got the impression that the head of the US central bank might be ready to lower interest rates.
Lower interest rates reduce consumer borrowing costs and can boost economic growth and demand for oil.
In China, the world’s second-biggest economy, fiscal revenue dipped 0.3 per cent in the first six months from a year earlier, the finance ministry said, maintaining the rate of decline seen between January and May.
Growing supplies?
The US is preparing to allow partners of Venezuela’s state-run PDVSA, starting with US oil major Chevron, to operate with limitations in the sanctioned nation, sources said on Thursday.
That could boost Venezuelan oil exports by a little more than 200,000 barrels per day (bpd), news US refiners would welcome, as it would ease tightness in the heavier crude market, ING analysts wrote.
Iran said it would continue nuclear talks with European powers after “serious, frank, and detailed” conversations on Friday, the first such face-to-face meeting since Israel and the US bombed Iran last month.
Venezuela and Iran are members of the Organization of the Petroleum Exporting Countries (Opec). Any deal that could increase the amount of oil either sanctioned country could export would boost the amount of crude available to global markets.
OPEC said the joint ministerial monitoring committee (JMMC) scheduled to convene on Monday does not hold decision-making authority over production levels.
Four Opec+ delegates said an Opec+ panel is unlikely to alter existing plans to raise oil output when it meets, noting the producer group is keen to recover market share while summer demand is helping to absorb the extra barrels. Opec+ includes Opec and allies like Russia.
In Russia, the world’s No 2 crude producer behind the US, daily oil exports from its western ports are set to be around 1.8 million bpd in August, down from 1.9 million bpd in July’s plan, Reuters calculations based on data from two sources show.
In the US, energy firms this week cut the number of oil and natural gas rigs operating for the 12th time in 13 weeks, energy services firm Baker Hughes said in its closely followed report on Friday. REUTERS
