Brent crude inches up, U.S. oil falls on weak economic data
U.S. benchmark crude prices fell on weak economic indicators on Friday while Brent oil ticked higher, supported by tensions over Iran and this week’s decision by OPEC and its allies to extend a supply cut deal until next year, reports Trend citing to Reuters.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were down $0.48 at $56.86 per barrel by 1013 GMT. There was no settlement price on Thursday because of the Independence Day holiday in the United States.
Front-month Brent crude futures LCOc1 were up $0.28 at $63.58 per barrel. Both benchmarks were set for their biggest weekly falls in five weeks.
In a protracted trade war between the United States and China that dampened prospects of global economic growth and oil demand, representatives of both countries are resuming talks next week to resolve the deadlock.
“The truce between the United States and China is not translating into anything in the real economy in the short term,” said Olivier Jakob, Petromatrix oil analyst.
“The negotiations still have to happen and until then we will be still looking at very weak manufacturing PMIs,” he said referring to Purchasing Managers’ Indices which indicate companies’ optimism about their sector.
German industrial orders fell far more than expected in May, and the Economy Ministry warned on Friday that this sector of Europe’s largest economy was likely to remain weak in the coming months.
In the United States, new orders for factory goods fell for a second straight month in May, government data showed on Wednesday, stoking economic concerns.
The U.S. Energy Information Administration on Wednesday reported a weekly decline of 1.1 million barrels in crude stocks, much smaller than the 5 million barrel draw reported by the American Petroleum Institute earlier in the week and analyst expectations.
Giving a floor to prices was this week’s commitment to cut production from the world’s largest exporters - including members of the Organization of the Petroleum Exporting Countries (OPEC) and other producers such as Russia, a grouping known as OPEC+.
Ongoing tension in the Middle East offered some limited support.
British Royal Marines seized an Iranian tanker in Gibraltar on Thursday for trying to take oil to Syria in violation of EU sanctions, a dramatic step that drew Tehran’s fury and could escalate its confrontation with the West.
“It is just another sign that the market sentiment is not strong enough to react to those headlines and events, which is quite unusual,” Jakob said.