Oil prices edge higher as Wall Street recoups losses
By Devika Krishna Kumar NEW YORK (Reuters) - Oil prices edged higher on Thursday and Brent hit the highest level this year, but gains were capped after the steepest decline in U.S. retail spending since 2009 heightened investor fears of a global economic slowdown
By Devika Krishna Kumar
NEW YORK (Reuters) - Oil prices edged higher on Thursday and Brent hit the highest level this year, but gains were capped after the steepest decline in U.S. retail spending since 2009 heightened investor fears of a global economic slowdown.
U.S. stocks recovered from declines triggered by bleak retail data to trade flat by afternoon, as investors focused on signs of progress in the ongoing U.S.-China trade talks.
Oil prices fluctuated with the equities markets as the U.S. economy's outlook was further dimmed by other data showing an unexpected increase in the number of Americans filing claims for unemployment benefits last week.
"Between supply issues out of Venezuela and Saudi Arabia and implications for demand swirling around the market as a result of the US-China trade war ... the crude oil and distillate markets have been subjected to a tug-of-war that has kept prices severely range-bound," said David Thompson, executive vice-president at Powerhouse, an energy-specialized commodities broker in Washington.
Brent futures ended the session up 96 cents, or 1.5 percent, at $64.57 a barrel, after hitting a 2019 high of $64.81, while U.S. crude rose 51 cents, or 0.95 percent, to $54.41 a barrel, down from a session high of $54.68.
The price of crude has gained nearly 20 percent this year, driven primarily by the prospect of a decline in oil supply from the Organization of the Petroleum Exporting Countries and other top exporters such as Russia.
The producer group known as OPEC+ has agreed to cut crude output by a joint 1.2 million barrels per day. Top exporter Saudi Arabia said it would cut even more in March than the deal called for.
"While medium-term trends pose some challenges, we still see a balanced oil supply/demand outlook this year. Brent should average $70 in 2019, helped by voluntary (Saudi, Kuwait, UAE) and involuntary (Venezuela, Iran) declines in OPEC supply," Bank of America analysts said in a note.
"Some of today's recovery in the oil also appeared to be related to some weakening in the U.S. dollar following early strong gains," Jim Ritterbusch, president of Ritterbusch and Associates, said.
The dollar dropped to session lows on Thursday morning following the U.S. retail sales report.
Oil prices also drew support from a surprise increase in China's exports in January and a sharp rise in imports of crude oil before the Lunar New Year holidays in February.
However, in physical markets, the steep rise in availability of U.S. shale oil is leading to a build in domestic inventories of crude and in refined products.
Government data on Wednesday showed U.S. crude stocks last week rose to their highest since November 2017 as refiners cut runs to the lowest since October 2017.
(For a graphic on U.S. oil output, storage levels, click here https://tmsnrt.rs/2GVNTmb)
(Additional reporting by Amanda Cooper and Alex Lawler in London, Henning Gloystein in SINGAPORE and Colin Packham in SYDNEY; Editing by Susan Thomas, Marguerita Choy and Edmund Blair)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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