Oil takes a hit as sombre economic outlook outweighs supply concerns

Oil takes a hit as sombre economic outlook outweighs supply concerns

On the strength of that the Brent crude oil futures were at $66.52 per barrel down 51 cents, or 0.8 per cent, from their last close, while U.S. West Texas Intermediate (WTI) futures were at $58.42 per barrel, down 63 cents, or 1.1 per cent, from their last settlement.

'The oil market was anxious about a global recession, and now we're kind of shaking that off and thinking that if the USA stock market can turn higher, maybe things aren't so bad, ' Phil Flynn, an analyst at Price Futures Group in Chicago told Reuters.

Crude futures were little changed in post-settlement trade after the American Petroleum Institute, a trade organization, said USA crude inventories rose 1.9 million barrels in the latest week.

Oil prices fell on Thursday, extending losses into a second consecutive session following a surprise rise in US crude inventories and President Donald Trump's latest tweet asking OPEC to tamp down the cost of crude.

ANZ bank said the darkening economic outlook "overshadowed the supply-side issues" the oil market was facing amid supply cuts, led by producer club OPEC as well as the USA sanctions on Venezuela and Iran.

"If that goes lower, that implies you don't need as much gasoline", Yawger said."That implies you don't need as much crude oil to make gasoline and that just sends the whole chain of command on a downward spiral".

OPEC agreed to cut its supply of oil after prices collapsed through the fourth quarter of 2018 in response to shrinking demand for the commodity amid slowing global growth.

US crude inventories are forecast to have fallen by 2.4 million barrels in what would be a third straight weekly decline. However, the rising Brent-WTI spread might boost U.S. oil exports and mitigate the impact of OPEC's supply cuts.

Washington seeks to bring Iranian oil exports to zero.

In early May, analysts expect the United States will extend some sanction waivers on Iranian oil but might reduce the number of countries receiving them.

"Enjoy it whilst it lasts". The drop in production has led to a tightening of oil inventories.

Despite the surging prices, analysts are expressing concerns about future oil demand amid worrying signs the global economy may move into a recession.

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