Thursday , June 17 2021

Oil retreats, hampered by US production and trade war

At the end of the session, reports that Donald Trump's government was studying the possibility of eliminating some or all of the tariffs imposed on China have, however, mitigated the fall in prices.

North Sea Brent crude for March delivery closed at $ 61.18 on the London Intercontinental Exchange (ICE), down 14 cents from Wednesday's close.

On the New York Mercantile Exchange (Nymex), a barrel of light crude oil (WTI) for the February contract lost 24 cents to $ 52.07.

"Oil is mired in political news and conflicting signals on supply and demand," said Phil Flynn of the Price Futures Group.

In the midst of a trade war between Beijing and Washington, US courts opened a criminal investigation into suspected technology theft by China's telecommunications giant Huawei, the Wall Street Journal reported on Wednesday. Huawei is a matter of diplomatic and commercial discord between the two powers.

This bad news for relations between the two countries causes investors to fear a stalemate in the trade war, and the aggravated consequences on the growth of the world's two largest economies, signaling declining global energy demand.

Market uncertainty occurs as US oil production is more hectic than ever before, with an average of 11.9 million barrels per day extracted from US soil, according to the Agency's latest weekly report. News from the United States. Energy (EIA) Wednesday.

Earlier this week, the EIA also predicted that black gold production in the United States is expected to be 12.9 mbd by 2020.

In this context, the efforts of the Organization of the Petroleum Exporting Countries (OPEC), which limits its production to sustain prices, are not enough to reassure the market.

Total OPEC production declined from 751,000 barrels per day (bd) in December to 31.58 million barrels per day (bpd), with Saudi Arabia alone accounting for more than half that decline. according to secondary (indirect) sources quoted by OPEC in its monthly oil report published Thursday.

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