Crude Oil Possibly Setting Up For A Big Downside Move

Crude Oil Possibly Setting Up For A Big Downside Move

USA crude CLc1 was down 30 cents at $73.50.

US crude futures fell on Thursday as official data showed the country's oil inventories rose unexpectedly last week.

The market situation show a continuation of tightening, as the immediate delivery prices are higher than those of future deliveries.

That came after an outage at a major Canadian oil sands facility cut regional supply.

USA crude output stayed flat at 10.9 million barrels per day (bpd).

But by 5.28am GMT, US West Texas Intermediate (WTI) crude futures were up 13c or 0.2% from their last settlement at $$73.07 a barrel.

China has indicated that it could place a tariff of 25% on US oil. Global benchmark Brent slipped 28 cents to settle at $77.11 a barrel.

After noting that China holds about $118 trillion in USA debt, Guilfoyle pointed out that "we've got a pretty hot economy" and that China is struggling in comparison: "They have retail sales in the hole. they've got industrial production in the hole, the Shanghai Composite [stock index] is down 17 percent year-to-date".

Meanwhile, Brent oil price was under pressure on Friday amid an escalating global trade tensions.

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USA markets also garnered support from a government employment report showing better-than-expected growth in jobs.

China has said it would immediately retaliate with its own tariffs, and U.S. President Trump said on Thursday the United States may ultimately impose tariffs on more than a half-trillion dollars worth of Chinese goods, in what may become a fully blown trade war.

Concerns that oil prices will be weighed down by a trade conflict between the United States and China have faded to some extent, analysts said.

Tariffs would make US oil uncompetitive in China.

Energy consultancy FGE this week issued a stark warning of looming supply shortages due to US sanctions against Iran, and because of disruptions elsewhere.

"Iran's exports are some 2.7-million barrels a day, including condensate", it noted. South Korea, a major buyer of Iranian oil and condensate, will not lift any Iranian oil in July for the first time since August 2012, three sources familiar with the matter said on Friday.

Oil prices steadied on Monday as an increase in US drilling, likely to lead to higher shale production, balanced evidence of tightening supply.

Venezuela is expected to lose another 400,000 bpd by year-end with production going to below 1 million bpd.

In addition to reducing the price of its August barrels, Saudi Arabia also told the Organization of the Petroleum Exporting Countries (OPEC) that it increased production by nearly 500,000 barrels per day last month.

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