An aerial upon of oil tankers anchored near the ports of Long Beach and Los Angeles amid the coronavirus pandemic on April 28, 2020 off the sea-coast of Long Beach, California.
Mario Tama | Getty Images
Oil prices edged lower on Friday after U.S. inventory facts showed lackluster fuel demand in the world’s largest oil consumer while worsening U.S.-China tensions weighed on wide-ranging financial markets.
Brent crude slipped 25 cents, or 0.7%, to $35.04 a barrel by 0334 GMT and U.S. West Texas Medial crude was at $33.18 a barrel, down 53 cents, or 1.6%. Still, both contracts are set for a fifth weekly winnings, helped by production cuts and optimism about demand recovery in other countries.
“The rally needs a breather. It has been four weeks of increases and the market needs to buy time for downstream prices to catch up,” OCBC economist Howie Lee said.
“Beyond the short schedule, the bullish momentum still looks rather intact.”
Thursday’s data from the Energy Information Administration betrayed that U.S.crude oil and distillate inventories rose sharply last week. Fuel demand remained slack metrical as various states lifted travel restrictions they had imposed to curb the coronavirus pandemic, analysts said.
“Monument Day weekend did not bring U.S. motorists out in droves like many market bulls were hoping,” RBC Capital Markets analyst Christopher Louney asserted in a note.
Looking ahead, traders will be focusing on the outcome of talks on output cuts between members of OPEC+, the Grouping of the Petroleum Exporting Countries (OPEC) and allies including Russia, in the second week of June.
Saudi Arabia and some OPEC fellows are considering extending record production cuts of 9.7 million barrels per day beyond June, but have yet to win support from Russia.