Oil prices were trading down sharply on Friday morning, after earlier it looked like they might be heading for their biggest weekly gain since the beginning of July, thanks to a huge U.S. inventory draw, a hurricane approaching Florida, and somewhat softened U.S. vs China trade war rhetoric.
At 09:50 a.m. EDT on Friday, WTI Crude was down 0.78 percent at $56.27 and Brent Crude was trading down 0.55 percent at $60.16. But by 11:48, prices slipped further into bear territory as analysts slash price forecasts citing the ongoing trade dispute between China and the United States.
WTI, however, was still set to finish higher for week.
AT the end of last week, China and the United States traded tariff and counter-tariff announcements, with Beijing saying first that China would place tariffs on a range of U.S. products worth US$75 billion, including crude oil, in two batches starting on September 1 and on December 15. U.S. President Donald Trump retaliated with announcements of higher tariffs on Chinese products. The escalation in the dispute sent oil prices tumbling last week, and triggered new forecasts.
Oil prices continue to be capped by concerns over global economic growth and oil demand growth, but a huge draw in U.S. oil inventories lifted the price of oil in the middle of the week.
The Energy Information Administration (EIA) reported on Wednesday a 10-million-barrel draw in crude oil inventories, following the American Petroleum Institute’s estimate of an 11.1-million-barrel draw in inventories, released on Tuesday. The estimate pushed WTI Crude to the biggest intraday gains in two weeks.
Oil prices had been supported somewhat on Friday by Hurricane Dorian which is approaching Florida’s Atlantic coast and could enter into eastern Gulf of Mexico next week. Refiners are keeping an eye on the path of the hurricane.
By Tsvetana Paraskova for Oilprice.com
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