The decline in the US oil supply to its lowest level for more than four months, fears the demand by Reuters

By Henning Gloystein

SINGAPORE (Reuters) – Oil prices have stabilized around their lowest levels since January, as markets remain under pressure from rising US supply and stagnant demand in a slowing economy. .

The one – month futures, the international benchmark for oil prices, were at $ 60.50 at 10:08 GMT. That was 13 cents, or 0.2%, less than the closing of the last session.

WTI (West Texas Intermediate) futures in the United States were $ 51.62 per barrel, 6 cents or 0.1% lower than their latest settlement.

Brent and WTI hit Wednesday their lowest level since January, at 59.45 and 50.60 dollars a barrel, respectively, in a context of rising inventories and record production, while a global economic slowdown began to weigh on energy demand.

Crude oil production in the United States hit a record 124.4 million barrels a day in the week to May 31, the Energy Information Administration (EIA) reported on Wednesday, up 1.63 million barrels a day since May 2018.

In a context of rising production, US commercial crude oil inventories increased by 6.8 million days to May 31, reaching 483.26 million barrels, their highest level since July 2017.

(GRAPH: links to drilling, production and oil storage levels in the United States: https://tmsnrt.rs/2DxgF8W).

"The increase in US production more than offsets the efforts of OPEC + and if we add the negative effect that a trade war could have on energy demand this will result in lower prices, "said Alfonso Esparza, Senior Analyst at OANDA, futures broker.

The producers' club of the Organization of Petroleum Exporting Countries (OPEC) dominated by the Middle East, as well as some unaffiliated producers, including Russia, known as OPEC +, have interrupted their oil supplies since the beginning of the year to support the market.

The supply being sufficient, despite the cuts made by OPEC, a lot will depend on the demand.

Global economic growth slowed at the end of last year but began to pick up in early 2019, but analysts now warn that growth is threatened again.

"Recent data suggests that the nascent recovery is down amid trade tensions and that a double dip is likely," Morgan Stanley (NYSE 🙂 said.

The US bank said it expects this slowdown to lead to "the lowest growth rate since the global financial crisis" of 2008/2009.

"We see trade tensions growing through direct links such as trade, commodities and tourism, as well as indirect links such as more difficult financial conditions weakening confidence and private sector spending," he said. Morgan Stanley.

(This story has been redefined to correct the day from the first paragraph to Thursday).