Oil Little Changed as Oversupply Worries Linger

Date : 10/09/2019 @ 8:43PM
Source : Dow Jones News

Oil Little Changed as Oversupply Worries Linger

By Sarah Toy 

Oil prices closed little changed Wednesday, erasing an earlier rally as traders awaited U.S.-China trade talks and weighed a mixed inventory report.

U.S. crude futures fell less than 0.1% to $52.59 a barrel, and Brent, the global gauge of prices, added 0.1% to $58.32 a barrel. Crude had rallied more than 2% earlier in the day but erased that advance late in the session. Oil is near a two-month low and down about 30% in the past year as investors grapple with fears of slowing demand amid weak global growth.

Investors were anxious earlier this week when tensions between the world's two largest economies seemed to escalate after the U.S. imposed export restrictions on more than two dozen Chinese companies, citing their role in the abuse of Muslim minorities, and placed visa restrictions on Chinese officials.

But those fears seemed to ease somewhat after Bloomberg reported that China was open to reaching a partial deal ahead of official trade talks set to resume Thursday.

Traders were also parsing a mixed reading of domestic stockpiles. Data released by the U.S. Energy Information Administration, or EIA, showed that inventories rose last week for the fourth consecutive week and climbed more than analysts and traders surveyed by The Wall Street Journal expected. In another sign that there is plenty of oil available, the report showed U.S. supply rose to a record of 12.6 million barrels a day.

However, some analysts saw positive signs in the report: Inventories of gasoline and distillates fell more than expected. And total products supplied, a gauge of fuel consumption, were 3% higher than they were at this time last year, potentially easing some demand fears.

Still, some analysts expect prices to keep swinging on trade signals in the coming days.

"As this week proceeds, we look for trade headlines to overshadow other news items that would otherwise be influencing the direction of oil prices," analysts at Ritterbusch & Associates wrote in a note on Wednesday.

Investors were also monitoring signs of tension in the Middle East that could disrupt supply. Earlier this week, President Trump ordered the withdrawal of U.S. troops from Syria, effectively abandoning a key ally in the fight against Islamic State. On Wednesday, the Turkish military began an offensive in Syria to seize territory held by the U.S.-backed Kurdish forces.

Elsewhere in commodities, natural-gas futures continued their decline, falling 2.4% to $2.234 per million British thermal units amid worries of a supply glut. Prices for the fuel were on track for their 15th decline in the past 17 sessions.

Front-month gold futures rose 0.6% to $1,506.10 a troy ounce on the Comex division of the New York Mercantile Exchange, boosted by bets on lower interest rates that make the metal more attractive to yield-seeking investors.

 

(END) Dow Jones Newswires

October 09, 2019 15:28 ET (19:28 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.


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