A pump jack operates at sunset in an oil field in Midland, Texas, USA on August 22, 2018. Photographed on August 22, 2018.REUTERS/Nick Oxford/File Photo Obtaining license rights
TOKYO/SINGAPORE, Sept 8 (Reuters) – Oil prices widened on Friday to their first fall in 10 months this week as concerns about the health of China’s economic slowdown and a strong dollar erased gains from supply cuts from major countries. It has retreated further from its highs. The producers are Saudi Arabia and Russia.
At 0355 GMT, Brent crude oil futures were down 51 cents, or 0.6%, at $89.41 a barrel, while U.S. West Texas Intermediate (WTI) futures were down 58 cents, or 0.7%. It became $86.29.
Both indexes hit 10-month highs earlier this week after Saudi Arabia and Russia extended voluntary supply cuts until the end of the year, raising concerns about potential shortages during the peak winter demand period.
Priyanka Sachdeva, senior market analyst at Philip Nova, said that despite these bullish signs, China’s uneven economic recovery and a strong U.S. dollar were weighing on the market.
Investors expect U.S. interest rates to remain at 20-year highs, freeing up the dollar and making it more expensive to buy oil in other currencies.
The US dollar index (.DXY) fell slightly below its six-month high on Friday.
“Investors took profits following the recent rally due to concerns about tight supply due to extended production cuts in Saudi Arabia and Russia,” said Tatsufumi Okoshi, senior economist at Nomura Securities.
“Markets are pricing in news of lower supply and will need clear signs of stronger demand globally, particularly in China, for any rally to occur,” he said, adding that the Chinese government’s stimulus measures have so far slowed demand. He pointed out that the consensus among investors is that the market has not been supported. economy.
China’s overall exports and imports fell in August, data showed on Thursday, as the twin pressures of weak overseas demand and weak consumer spending weighed on businesses in the world’s second-largest economy.
However, China’s crude oil imports rose 30.9% last month as refiners built up inventories and ramped up processing to benefit from higher profits from fuel exports.
Higher-than-expected U.S. crude oil inventories provided a modest underpinning for crude oil prices.
U.S. crude oil inventories fell for the fourth straight week, with inventories down more than 6% last month as refineries ran at high capacity to meet global energy demand, Energy Information Administration data showed Thursday. Ta.
Crude inventories fell by 6.3 million barrels, three times the 2.1 million barrel drop analysts expected.
Despite promises to maintain supply cuts, Russia is expected to increase oil exports in September as Russian refineries begin seasonal maintenance, according to Reuters calculations based on data from sources. , which also suppresses price increases.
Brent and WTI continued their trajectory up close to 1% this week.
Report by Yuka Obayashi and Mengyu Xu.Editing: Jamie Freed and Miral Fahmy
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