West Texas Intermediate or WTI crude oil and benchmark Brent oil prices went up in today’s sessions. Demand concerns were raised after weak US economic data was released, causing WTI crude and Brent oil to gain.
Aside from that, the big loss in oil inventory stocks also helped petroleum and oil prices to rally in sessions.
WTI crude oil prices went up by 0.80%, or 0.42 points, in sessions. A barrel of WTI crude currently costs around $52.87 and has swung from $52.27 to $52.91 in today’s trading.
Meanwhile, benchmark Brent oil prices went up 0.78% or 0.45 points this Friday’s exchange. Brent oil barrels currently trade for $58.16 and has hit ranges between $57.67 and $58.22.
Weak data from the US services sector and jobs growth data yesterday added to the concerns of traders about oil demand. Critics are also getting more worried about the protracted trade war between the US and China and the possibility of a global recession.
The Institute of Supply Management also said earlier this week that the non-manufacturing index of the US fell. According to reports, the US non-manufacturing hit its lowest level since August of 2016.
WTI crude prices are likely to continue gaining if the US continues serving weak results.
Saudi Aramco Recovers
Just yesterday, Saudi Arabia said that Saudi Aramco has now fully recovered from the September 14 drone attack.
Last month, the oil refineries of Saudi Aramco suffered a drone attack. Prince Abdulaziz bin Salman, Energy Minister of Saudi Arabia, said that the company has fully restored its oil output capacity.
The news caused the WTI crude and Brent oil prices to gain in sessions. The Kingdom’s oil production capacity is now at 11.3 million barrels per day.
The prince gave the good news at a conference in Russia, boasting that the nation “rose to the challenge” as it successfully recovers.
Iran vs Everyone?
Tensions in the Middle East, particularly between Iran and Saudi Arabia, continue to affect WTI crude prices. Aside from the Iran vs. Saudi Arabia matchup, Iran isn’t also in good terms with the US and UK.
Critics have called out Tehran, saying that it is a repressive theocratic and a rogue state. And as the situation in the Persian Gulf escalates, one unexpected nation offers support.
Russia offered to establish an organization or council along with the US, EU states, and other countries. According to reports, Russian President Vladimir Putin himself suggested the idea on the plenary session of the Valdai Discussion Club.
Russia wants to resolve the issues on the Persian Gulf, particularly in the Strait of Hormuz. Ideally, if the situation is deescalating, WTI crude and petroleum prices won’t continue to jump high.
Last July 23, the Foreign Ministry of Russia introduced a concept of collective security in the Persian Gulf region.
The idea includes forming an initiative group that will organize an international conference on security and cooperation in the region. Aside from that, Russia also offered to form demilitarized zones in the Persian Gulf region.