Oil falls to lowest since January on economic slowdown

Oil Slides as Rising U.S. Stockpiles Stoke Glut FearsMore

Oil Slides as Rising U.S. Stockpiles Stoke Glut FearsMore

Oil extended losses after plunging 10% in four days as the prospect of a sharp slowdown in global economic growth due to trade frictions overshadowed Saudi Arabia's pledge to maintain market stability. The U.S. has summoned back all non-emergency American workforce deployed in Iraq, for this objective they have sent the USS Abraham Lincoln aircraft carrier, B-52 bombers.

"Yesterday's upswing on the back of rising stock markets was halted by an unexpectedly sharp rise in US crude oil and product stocks", Commerzbank said.

That has come as financial traders sell out of energy markets amid growing concerns about the outlook for the world economy amid the trade war between the United States and China.

US West Texas Intermediate (WTI) crude rose 23 cents, or 0.4 per cent, to US$53.48, rising over a dollar from its session low.

Front-month Brent crude futures were at $62.40 at 1150 GMT, up 41 cents, or 0.66%, above Friday's close.

Meanwhile, Saudi Energy Minister Khalid al-Falih has called recent volatility "unwarranted" and has said he expects OPEC to help to stabilize prices beyond the end global output pact that ends at the start of July.

In addition to this concern, Rosneft's Igor Sechin yesterday spoke out openly against an extension to the production cuts into the second half of the year and said Rosneft would seek compensation from the Kremlin if it decides to stay in the deal.

Iranian officials, however, have dismissed such moves as psychological warfare, saying the country has its own ways of circumventing the American bans and selling crude oil.

United States stocks moved higher on Wednesday, but defensive shares were the best performers, as USA yields rebounded sharply despite a worse than expected jobs report.

Brent crude prices have dropped nearly 20% from their 2018 peak as global supplies tighten following output curbs by OPEC and Russian Federation, as well as a drop in Iranian exports, due to US sanctions, and Venezuelan production.

Swelling US crude inventories continue to pressure oil prices. "China trade war has added further downside risks to already slowing economies", he said.

Saudi Arabi, however, boosted its oil production to keep OPEC's commitments to the market by maintaining an overall steady output for the cartel, keeping supplies mostly unaffected.

The prospect of a cut in Norway's oil and gas output of about 440,000 barrels of oil equivalents per day, or about 11% of total production, if workers go on strike from June 4 also supported prices.

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