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HOUSTON, July 27 (Xinhua) – Oil prices edged up for the week ending July 26, with West Texas Intermediate (WTI) prices for the September delivery increasing 1.02% and Brent crude oil 1.58% for the September delivery.
WTI closed the week at 56.20 US dollars a barrel on the New York Mercantile Exchange, while Brent crude ended the week at 63.46 dollars a barrel on the London ICE Futures Exchange. WTI and Brent rose 23.76% and 17.96% respectively so far this year.
During the week, WTI crude and Brent moved in the same direction, recovering the ground lost the previous week, as fears over demand and withdrawal of US crude oil stocks were contradictory and shocks geopolitics failed to support prices.
Oil prices rose on Monday and Tuesday as investors pondered possible supply disruptions in the Middle East. The market has closely followed recent developments in US-Iranian friction, raising concerns about the global supply of oil.
WTI rose by $ 0.59 and $ 0.55 to settle at $ 56.22 and $ 56.77 per barrel on Monday and Tuesday respectively, while Brent crude gained $ 0.79 and $ 0.57. to close at 63.26 and 63.83 dollars per barrel.
On Wednesday, oil prices fell despite the decline in US crude inventories last week as investors feared weaker demand. WTI lost $ 0.89 to settle at $ 55.88 a barrel, while Brent crude lost $ 0.65 to close at $ 63.18 a barrel.
For the week ending July 19, commercial crude inventories in the United States decreased by 10.8 million barrels over the previous week, exceeding market forecasts of $ 4.0 million. barrels, which implies increased demand and higher crude prices. However, badysts pointed out that the drop in crude inventories was due to disturbances caused by a storm in the Gulf of Mexico earlier this month and considered a "one-time event".
At the same time, the International Monetary Fund (IMF) lowered its global growth forecast to 3.2% in 2019. In April, the agency forecast a 3.3% growth in gross domestic product (GDP) global, but slow growth in the first half of the year, trade and technology disputes and uncertainties over Britain's withdrawal from the European Union led to a downward adjustment.
The latest report on the IMF's global economic outlook also lowered the outlook for 2020 from 3.6% to 3.5%. Depreciated forecasts raised concerns about demand for crude oil, which put pressure on oil prices.
On Thursday, oil prices rebounded slightly and continued to climb on Friday, due to bullish sentiment due to the sharp decline in US crude oil inventories and supply concerns due to declining oil rigs. for the fourth week in a row. According to Baker Hughes, a Houston-based oil services company, the number of US oil rigs has dropped 11% this year.
WTI rose $ 0.14 and $ 0.18 to settle at $ 56.02 and $ 56.20 per barrel on Thursday and Friday respectively, while Brent crude rose 0.21 and 0.07 dollar to close at 63.39 and 63.46 dollars per barrel.
Oil prices have continued to gain ground since the beginning of the year due to geopolitical concerns and OPEC's decision to reduce its production. The momentum has recently slowed down, mainly because of worries about slowing demand for crude oil.
The slowdown in the global economy continued to be a major problem for crude oil. The slowdown in global economic growth will result in lower demand for oil, which would put downward pressure on oil prices.
In addition, the appreciation of the US dollar over the past few months has weighed on US dollar denominated futures, with the US dollar index continuing since the middle of 2018. For the week ending July 26, US Dollar Index, surpbading the 97.80 level and opening the doors to the 2019 high.
Oil is traded primarily in dollars around the world and a stronger dollar puts pressure on oil demand.
In addition, some major oil services companies have been concerned about the contraction of the American shale. John Lindsay, CEO of Helmerich & Payne, a large US-based oil services company, said in a statement on Wednesday that the sector would face increasing financial difficulties as drilling slowed.
"The effect of the sector on disciplined capital spending continues to impact the service sector for oil fields," Lindsay said, adding that "we are reluctant to plan another fund and see a new one. slowdown during our fourth quarter, as indicated by our forecasts. "
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