On Tuesday, August 6, the price of Brent crude oil futures increased by 0.4% to $60.06 per barrel. The black gold market remains under pressure, despite frequent attempts at a corrective rebound, thanks to which oil prices are close to $60.5.
Pressure on the black gold market is exerted by foreign trade uncertainty and the risks associated with a possible drop in energy demand. The United States threatened to introduce 10% duties on Chinese goods worth $300 billion a year starting on September 1, 2019, in this process. Donald Trump's statement on the introduction of restrictions on goods from China produced the effect of an exploding bomb, analysts say. A similar situation knocked the ground out from under the feet of investors. "Suddenly caught between the escalation of the US trade war and promises of Chinese retaliation, investors have come up with nothing better than to pull down the stock market and oil quotes," analysts say with bitter irony.
Another significant factor creating a threat to the global economy was the decision of Chinese authorities to depreciate the national currency. As a result, the US dollar rose above 7 yuan to a high of more than 10 years.
A day earlier, on Monday, analysts marked an increase in Brent oil quotes during Asian trading in response to a demonstration of strength by Iran and growing tensions with the West. At the same time, WTI crude oil fell in price due to concerns about a decrease in demand in China, which remains one of the leading buyers of US oil.
Weak quarterly data from many US mining companies also put pressure on WTI quotes. For example, papers of Concho Resources Corporation sank by an impressive 22% last Thursday. The company's management plans to reduce costs and abandon the drilling of new wells in the second half of 2019 in order to stabilize oil prices.
According to analysts, exports of raw materials from the United States grew by 260 thousand barrels in June, reaching a record 3.16 million barrels per day. According to analysts, this indicates a high offer. However, the overall picture of the black gold market is not very positive. Analysts at the largest Goldman Sachs bank believe that oil demand in 2019 did not live up to expectations. This year, demand for black gold has disappointed market participants due to weak economic activity and tensions in world trade, Goldman Sachs emphasizes.
The material has been provided by InstaForex Company - www.instaforex.com