After seeing gains for most of the week, crude oil futures were softening during Friday morning trading in Europe amid heightened global trade tensions.
At 1115 GMT, in its last day of trading the October ICE Brent crude contract was down 33 cents from Thursday’s settle at $77.44/b, while the NYMEX October light sweet crude contract had dropped 45 cents to $69.81/b.
Global markets were roiled once again by comments by US President Donald Trump, who has threatened to withdraw the country from the World Trade Organization, and has continued his saber-rattling with China by threatening to impose new tariffs.
“Trade war jitters have resurfaced as Donald Trump doubles down on his battle with China,” said Stephen Brennock, in the PVM Fundamental report. “The US President most recently reiterated his intent to roll out $200 billion in new tariffs on Chinese imports. What is more, he threatened to pull out of the WTO as he continues in his bid to upend the global trade order. In any case, such belligerence will do no favors for the global economy or oil demand prospects and may put the brakes on price upside potential.”
Meanwhile in the Middle East, OPEC and its allies on Thursday said that they would review the monitoring mechanisms of its output agreement at the Joint Ministerial Monitoring Committee meeting in Algiers on September 23, but added that they saw the current oil market as largely balanced.
OPEC’s largest producer and the world’s largest crude exporter, Saudi Arabia, will report August crude production of 10.424 million b/d, an OPEC source told S&P Global Platts on Friday.
The figure represents a 136,000 b/d increase from July when the country self-reported production of 10.288 million b/d. The kingdom supplied to market 10.467 million b/d in August, the source added on condition of anonymity. That means the sum of crude exported to customers, consumed by Saudi refineries and burned by domestic power plants slightly exceeded the amount of crude that was pumped out of the ground in the month, indicating a draw of barrels held in storage.
Market participants will be keeping an eye on the Baker Hughes rig count data, an early indicator of future US crude production, which will be published later Friday. Platts