Monday, 25 May 2020 08:31 WIB |
Oil edged lower as an escalating war of words between the U.S. and China added to caution over the prospects for a global recovery in demand.
Futures in New York lost 0.4% in Asian trading after falling 2% on Friday. China warned that some in the U.S. were pushing the countries toward a new Cold War, stoking concerns that deteriorating relations between the superpowers could complicate the market™s recovery from a historic demand crash. Beijing last week abandoned its decades-long practice of setting an annual target for economic growth due to uncertainty caused by the coronavirus.
However, there are signs the oil market is positioning itself for a recovery. U.S. shale drillers have cut the number of active rigs to the lowest level since 2009, trimming output further. This comes as OPEC+ slashes daily output by almost 10 million barrels in an effort to reduce a glut.
Oil has surged about 75% this month as pockets of demand return in China and India after the easing of lockdown restrictions, and as U.S. crude inventories start to decline. However, the recovery is expected to be long and uncertain, with the risk of a second wave infections possibly complicating a rebound.
The U.S. should give up its œwishful thinking of changing China, Foreign Minister Wang Yi said Sunday during his annual news briefing on the sidelines of National People™s Congress meetings in Beijing. He also warned America not to cross China™s œred line on Taiwan.
West Texas Intermediate crude for July delivery declined 12 cents to $33.13 a barrel on the New York Mercantile Exchange as of 8:24 a.m. in Singapore.
Brent for July settlement slipped 0.7% to $34.90 on the ICE Futures Europe exchange after falling 2.6% on Friday.