Oil falls on expectations of a decline in demand and trade disputes

Oil prices fell yesterday because of fears of an economic slowdown and a trade war between China and the United States that resulted in a reduction in growth prospects for global crude oil demand.

Brent crude futures were at $ 58.40 per barrel, down 13 cents or 0.2% from the previous settlement. The WTI futures price (West Texas Intermediate) was $ 54.33 per barrel, down 17 cents (0.3%) from the previous close.

Futures on Brent and WTI tumbled last week, down more than 5% for Brent and down 2% for West Texas Intermediate.

The trade dispute between the United States and China shook the global stock markets last week, and a sudden increase in US crude oil inventories put downward pressure on oil prices, which lost about 20% of their peaks of 2019 in April.

The International Energy Agency (IEA) said Friday that growing signs of an economic slowdown and escalating trade disputes had slowed the growth of global oil demand at a slower pace since the 2008 financial crisis. The Paris-based agency lowered its global oil demand growth forecast in 2019 and 2020 to 1.1 million and 1.3 million barrels per day , respectively.

Kuwait's commitment

For his part, the Kuwaiti Minister of Petroleum, Khalid Al-Fadhil, said that Kuwait's commitment to implement the agreement to reduce production among members of the Organization of the Countries oil exporters (OPEC) had reached about 160% last July.

Al-Fadhil said in a press release yesterday that, technically linked to the performance indicators of the oil markets, up to now, despite the recent drop in prices, oil markets are still mainly supported by an unprecedented commitment to favor of the implementation of the production reduction agreement between the Organization of Petroleum Exporting Countries "OPEC.

He stressed that Kuwait continues to meet its commitments to make this historic agreement a success and restore stability in world oil markets.

Al-Fadhel pointed out that global oil market performance indicators are still almost stable and global oil demand is acceptable and is expected to pick up in the coming months, despite the recent drop in oil prices and overestimation. global economic concerns negatively affect the stability of the oil markets.

Regarding the most important technical indicators to measure the performance of oil markets, Fadil said that the surplus of oil stocks remained stable and would gradually decline, along with several other positive factors, the most important of which is that demand for oil increases in the second half due to the end of the holding season. Periodic refineries around the world, as well as many new refineries in service in Asia and the Middle East by the fourth quarter of this year.

He highlighted the global oil shortage in many countries (OPEC), as well as the constraints on marine production in the Gulf of Mexico in July because of Hurricane Barry, as well as the many growth expectations of shale production recently.

He pointed out that the slowdown in global economic growth was causing a lot of concern and that these had clouded the stock markets and therefore the world oil markets, expressing his optimism about the improvement of the situation of the markets. in the next few months.

Russia

Russian oil production reached 11.32 million barrels per day (bpd) between August 1 and 8, against an average of 11.15 million bpd in July, said two sources close to data from the Russian Ministry of Energy. l & # 39; Energy.