Oil Shakes Off Tariff Woes as U.S. Sends Warships to Middle East
Tuesday, 7 May 2019 13:29 WIB |
Oil held gains above $62 a barrel as heightened tensions in the Middle East overshadowed a U.S. plan to raise tariffs on Chinese goods.
Futures edged higher in New York after closing up 0.5 percent on Monday. The U.S. is sending an aircraft carrier strike group and bomber force to the oil-rich region amid rising tensions with Iran, which has threatened to block the Strait of Hormuz. That buoyed crude prices, which were down more than 3 percent at one point on Monday, and outweighed news that the White House will raise levies on Chinese goods on Friday, threatening the global growth outlook.
Oil™s rally has gone into reverse in the last couple of weeks on speculation Saudi Arabia and other producers will pump more to make up for lost Iranian barrels. American drillers have also boosted output to a record and nationwide stockpiles climbed to the highest since September 2017. Meanwhile, the sudden deterioration in U.S.-China trade relations are souring a demand outlook that had been improving over the last couple of months.
West Texas Intermediate crude for June delivery rose 17 cents, or 0.3 percent, to $62.42 a barrel on the New York Mercantile Exchange at 12:42 p.m. in Singapore. The contract has lost around 6 percent since reaching the highest level in almost six months on April 23.
Brent for July settlement added 3 cents to $71.27 a barrel on the London-based ICE Futures Europe exchange after falling as much as 31 cents, or 0.4 percent, earlier. The contract settled 0.6 percent higher at $71.24 on Monday. The global benchmark crude was at a premium of $8.73 to WTI for the same month.
Source : Bloomberg