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On August 16, oil prices rebounded after a two-day slide alongside equities as expectations of additional stimulus from central banks eased fears of a recession.
But oil gains were capped after the Organization of Petroleum Exporting Countries lowered its global oil demand forecast in a downward outlook for the remainder of 2019 as economic growth slowed.
The deal also highlighted the challenges ahead in 2020 as rivals pump more, arguing for the continuation of an OPEC-led pact aimed at restricting supplies.
"The OPEC has killed the gold goose," said Bob Yawger, director of futures at Mizuho in New York. "We've had a couple of times in the green, while the market is trying to track stocks up, but the fundamentals of the report are so bearish that they're limiting the times."
Brent closed the session up 41 cents, or 0.7%, to 58.64 dollars a barrel, after a fall of 2.1% Thursday and 3% the day before. US crude rose 40 cents to settle at 54.87 dollars a barrel, after dropping 1.4% in the previous session and 3.3% on Wednesday.
Prior to OPEC's monthly report, Brent had hit a high of 59.50 USD and US crude was trading at 55.67 USD, investors expecting further declines in interest rates of the Federal Reserve and the measures taken by the European Central Bank next month to combat the slowdown in growth.
For the week, both oil indexes posted slight gains after two consecutive weeks of losses, even as the three major Wall Street indexes were on the verge of accumulating their third weekly loss, investors said. worrying about the risk of recession and trade tensions between the United States and China. .
BNP Paribas lowered its guidance for 2019 for US crude from $ 8 to $ 55 per barrel and for Brent from $ 9 to $ 62 per barrel, due to a slowdown in the economy as a result of the trade dispute.
Earlier this week, the data released included an unexpected drop in China's industrial production growth to its lowest level in more than 17 years, and a drop in exports that reversed the German economy in the second quarter.
The price of Brent is still up nearly 10% this year, thanks to supply cuts led by OPEC and its allies such as Russia, a group known as OPEC. +.
In July, OPEC + decided to extend reductions in oil production until March 2020 in order to support prices.
"When will OPEC and Russia need further cuts in production by the end of this year to make things happen as they are?" said Phin Ziebell, senior economist at National Australia Bank.
A Saudi official said this month that further steps could be taken, saying that Saudi Arabia was determined to do "all that is necessary" to maintain the market equilibrium. 39 next year.
OPEC's efforts have been undermined by economic concerns, as well as increased crude oil inventories in the United States and increased production of American oil shale.
Also failing oil sector gains on Aug. 16, US energy companies this week increased the number of rigs operating for the first time in seven weeks, said Baker Hughes, General Electric Co's energy services company. .
The number of oil platforms, an early indicator of future production, has declined over the last eight months as independent exploration and production companies reduce their drilling costs as they focus more on profit growth than on the increase of production.Subscribe to Moneycontrol Pro and access market data, trading recommendations, stock badysis, investment ideas, market guru ideas, and more. Get Moneycontrol PRO for 1 year at the price of 3 months to 289. Use the FREEDOM code.
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