Petroleum Products Strengthen Amid OPEC Cuts Prospect

On Friday, as anticipations of more petroleum products in the OPEC production cuts provided some support, oil prices inched higher. But concerns over the long-running U.S.-China trade clash controlled the earnings.

International benchmark Brent crude futures were at $57.54 a barrel, growing 16 cents, or 0.3%, from their previous settlement.

Meanwhile, U.S. West Texas Intermediate (WTI) futures were at $52.68 per barrel, increasing 14 cents, or 0.3%, from the last trading.

On Thursday, both contracts soared above 2% and recovered from January lows.

In a news report, the world’s biggest petroleum products exporter, Saudi Arabia called other producers to discuss the recent slide in crude prices.

Oil prices have still declined 20% from peaks that were reached in April, putting them in bear territory.

Global financial markets were rattled as U.S. President Donald Trump said he would impose 10% tariffs on more Chinese goods over the past week.

Imposing of tariffs would start in September. The Chinese yuan also dropped when fears sparked a currency war.

A senior market analyst at Oanda in New York, Edward Moya, stated, “The tentative oil rebound could be short-lived as the U.S.-China trade dispute is providing no real reasons to be optimistic.”

In a news report, Washington said it was holding off a decision about licenses for U.S. companies to resume business with Huawei Technologies.

Maintenance of Crude Oil Exports

On Wednesday, a Saudi oil official said Saudi Arabia, de facto leader of the Organization of Petroleum Exporting Countries (OPEC), plans to uphold its crude oil exports below 7 million barrels per day in August and September. This is to bring the market back to balance and help absorb global oil inventories.

In a note, ANZ bank said, “Saudi’s production in September will also be lower than it is currently. This helped crude oil rebound from its lowest level since January.”

The country’s energy minister, Suhail al-Mazrouei, tweeted on Thursday indicating that the United Arab Emirates will also continue to back actions on balancing the oil market.

OPEC and non-OPEC ministerial monitoring committee would meet in Abu Dhabi on Sept. 12 to review the oil market, the minister said.

In July, OPEC and its allies, including Russia, agreed to extend their supply cuts until March 2020 to boost oil prices.