US-China trade war, US crude stocks are the focus of concern

Oil prices fell more than 1% on Monday, extending losses by more than 3% from Friday, when crude markets recorded their largest monthly losses in six months, as demand stagnated and oil prices fell. Trade wars alleviated fears of a global economic slowdown.

Brent futures in the first month were $ 61.16 at 10:09 GMT. That was 83 cents, or 1.3%, below Friday's close.

The WTI futures price (West Texas Intermediate) was $ 52.88 per barrel, down 62 cents or 1.2% from the previous settlement.

These declines followed a more than 3% fall in prices on Friday, making May the worst month for crude futures since last November.

"Oil prices have shrunk in the face of trade concerns after US President Donald Trump has fueled global trade tensions by threatening tariffs on Mexico, one of the United States' largest trading partners and an important Crude oil supplier, "said Mithun Fernando, investment badyst at Rivkin, an Australian Securities, in a note on Monday.

Edward Moya, Senior Market Analyst at OANDA, a New York-based futures broker, said the more than 10% drop in crude oil prices last month was "May's worst performance in seven years." , while the escalation of the World War darkened growth prospects. "

Moya warned "geopolitical risks remain in place" and added that "oil remains vulnerable" due to weaker prospects for crude demand.

"The US-China dispute remains the most critical for global growth prospects, but the addition of trade tensions between the United States and Mexico has resulted in slowing demand for the Americas," she said. he declared.

Barclays Bank said in a note published last Friday that oil consumption in March in the United States "has declined noticeably for the first time since September 2017 … Oil demand dropped by nearly 370,000 barrels a day (bpd) year on low consumption across the barrel ".

US bank Goldman Sachs said in a note published on Sunday that "escalating trade wars and weaker activity indicators have finally caught up with the sentiment of the oil market".

Brent crude oil prices fell nearly 20% from their peak in 2018 at the end of April.

"The magnitude and speed of the decline have been exacerbated by the growing concern over the strong growth in US production and rising inventories," said Goldman.

US energy companies this week increased the number of oil rigs operating for the first time in four weeks, and weekly output reached a record 12.3 million barrels per day (bpd).

This pushed up crude oil inventories in the United States, which rose 8.4% year-to-date to 476.5 million barrels.

"With increasingly uncertain macroeconomic prospects, rising US production and significant base available capacity of OPEC, helping to offset the decline in supply from Iran and the United States. Venezuela, we expect prices to remain close to our forecasts for the third quarter and current levels, although prices remain high volatility, "said Goldman.

The bank's Brent price for the third quarter of this year was $ 65.50 per barrel.