Oil heads for weekly gain as trade war headlines whipsaw market
Reposted from WorldOil.com
SINGAPORE (Bloomberg) – Oil headed for a weekly increase as hopes that the U.S. and China could resume negotiations to resolve their trade dispute capped a week of volatile trading.
Futures added as much as 1.7% on Friday in New York, bringing their gain for the week to 1.4%. President Donald Trump said he had a call coming soon with his Chinese counterpart Xi Jinping after a pledge from Beijing to retaliate against planned U.S. tariffs. Earlier in the week, oil surged the most in more than a month after the Trump administration said it would delay levies on some products.
Oil volatility has gained more than 9% this week through Thursday
Oil has swung between gains and losses this month as concerns about the impact of the U.S.-China trade war compete with a pledge from Saudi Arabia to keep markets balanced by limiting production. A second weekly surprise increase in American crude inventories compounded demand fears after weak economic data from Germany and China stoked negative sentiment.
“The yo-yoing on the oil market continues and the oil price remains highly prone to fluctuations,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “The oil price currently remains at the mercy of expectations for the global economy, and is thus caught between economic concerns and hopes that the trade dispute might end soon.”
West Texas Intermediate crude for September delivery rose $0.80, or 1.5%, to $55.27/bbl on the New York Mercantile Exchange as of 9:58 a.m. in London.
Brent for October settlement added $0.88, or 1.5%, to $59.11/bbl on the ICE Futures Europe Exchange, taking its weekly advance to 1%. The global benchmark traded at a $3.88 premium to WTI for the same month.
Plans by the U.S. for 10% tariffs on an additional $300 billion in Chinese imports have taken the two nations off the track of resolving their dispute through negotiation, China’s State Council Tariff Committee said in a statement on Thursday. Trump told reporters in Morristown, New Jersey, that he has a call scheduled “very soon” with Xi on trade.
“Investors are still hopeful about the possibility of further trade talks and Trump is likely pressured by the tumultuous sessions seen on Wall Street,” said Kim Kwangrae, a commodities analyst at Samsung Futures Inc. There’s upside for oil due to potentially easing trade conflicts and geopolitical risks, he said.
