Oil falters as trade tension counters threat from Barry

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Oil falters as trade tension counters threat from Barry

Investors are now awaitin the monthly report by Organization of the Petroleum Exporting Countries scheduled for release today and that by the International Energy Agency on Friday.

At 1625 IST, the July crude contract on MCX was 1% higher at 4,157 rupees a bbl and the August delivery contract on NYMEX was 0.5% higher at $60.73 a bbl.

Gulf of Mexico operators have shut 602,715 barrels a day of oil production ahead of the storm, the Bureau of Safety and Environmental Enforcement said in a notice.

Brent crude futures reversed early losses and were up 40 cents at $67.41 a barrel by 0852 GMT.

The Energy Info Administration reported Wednesday that USA indecent stockpiles fell by 9.5 million barrels closing week to the bottom in almost three months.

Crude oil prices calmed Thursday as Opec forecast slower demand for its crude in 2020, even as crude futures remained at their highest in more than a month as oil rigs in the Gulf of Mexico were evacuated ahead of the hurricane season's first tropical storm.

Oil prices were also supported by a fall in the dollar after Federal Reserve Chairman Jerome Powell bolstered expectations for USA interest rate cuts. This also marked the fourth consecutive weekly decline.

Tensions have been high in the Middle East after attacks on tankers and the downing of a US drone by Iran last month, following President Donald Trump's unilateral withdrawal from a multi-party agreement with Tehran to end its nuclear programme.

Demand for OPEC crude for 2019 was revised up by 0.1 mb/d from the previous report to stand at 30.6 mb/d, 1.0 mb/d lower than the 2018 level, WAM reports.

"This surplus adds to the huge stock builds seen in the second half of 2018 when oil production surged just as demand started to falter", the IEA said.

Early Friday, the International Energy Agency (IEA) expects the return of an oversupplied oil market next year, despite the OPEC-led pact created to cut production and stabilize prices.

"Clearly, market tightness is not an issue for the time being and any rebalancing seems to have moved further into the future". This stockpile draw comes as the OPEC plus group agree to extend the current output cut.

The demand concerns are a longer-term issue. The potential supply concerns due to the approaching tropical storm are a real short-term problem.

From a technical perspective, holding above their respective 200-day Moving Averages will indicate the presence of buyers. The September WTI crude oil support is $59.12 and the September Brent crude oil's support is at $66.63.

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