UPDATE 9-Oil drops 3% on weak global economic data, U.S. crude stocks build

UPDATE 9-Oil drops 3% on weak global economic data, U.S. crude stocks build

Reuters  | Aug 14, 2019 15:34

UPDATE 9-Oil drops 3% on weak global economic data, U.S. crude stocks build

* China July industrial output growth falls to 17-yr low Euro zone Q2 growth slows, Germany leads slowdown

* U.S. Treasury bond curve inverts for 1st time since 2007

* US crude stocks rise unexpectedly; record gasoline demand -EIA (Updates prices and market activity to settlement)

By Laila Kearney

NEW YORK, Aug 14 (Reuters) - Oil prices shed 3% on Wednesday after fresh Chinese and European economic revived global demand fears and U.S. crude inventories rose unexpectedly for the second week in a row.

Brent crude LCOc1 settled at $59.48 a barrel, shedding $1.82, or 3%, losing some of the previous session's sharp gains after the United States moved to delay tariffs on some Chinese products. global benchmark rose 4.7% on Tuesday, its biggest daily percentage gain since December.

U.S. West Texas Intermediate (WTI) crude futures CLc1 settled at $55.23 a barrel, falling $1.87, or 3.3%, after having risen 4% the previous session, the most in just over a month.

China reported disappointing data for July, including a surprise drop in industrial output growth to a more than 17-year low, underlining widening economic cracks as the trade war with the United States intensifies. global economic slowdown, amplified by tariff conflicts and uncertainty over Brexit, is also hitting European economies. A slump in exports sent Germany's economy into reverse in the second quarter, data showed. euro zone's GDP barely grew in the second quarter of 2019. data out of China, the potential recession brewing in Germany, all of that is playing into global demand worries," said Phil Flynn, an analyst at Price Futures Group in Chicago. "Today, we're back in fear mode."

The U.S. Treasury bond yield curve inverted for the first time since 2007, in a sign of investor concern that the world's biggest economy could be heading for recession. much focus today shifting toward the inversion in the two versus 10-year bond yields, global risk appetite saw another major contraction that easily flowed into the oil space," Jim Ritterbusch, president of Ritterbusch and Associates, said.

A second week of unexpected builds in U.S. crude inventories added to the pressure on the oil markets. EIA/S

U.S. crude stocks USOILC=ECI grew by 1.6 million barrels last week, compared with analysts' expectations for a decrease of 2.8 million barrels, as refineries cut output, the Energy Information Administration said in its report. At 440.5 million barrels, inventories were about 3% above the five-year average for this time of year, the EIA said in its weekly report.

"Countering this bearish (crude) build has been draws to both gasoline and distillates amid strong implied demand," said Matt Smith, director of commodity research at ClipperData in Louisville, Kentucky.

Gasoline stocks fell by 1.4 million barrels, compared with analysts' expectations in a Reuters poll for an increase of 25,000 barrels, as demand jumped to a record 9.93 million barrels per day, according to EIA data going back to 1991. USOILG=ECI

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ CHART-U.S. oil may test support at $55.73

L4N25A0XQ CHART-Brent oil may retrace to $59.92

L4N25A0FJ U.S. crude inventories, weekly changes since 2017 png

https://tmsnrt.rs/2y7mC9g Yield curve inversions, recessions & U.S. stocks

https://tmsnrt.rs/2MZidOp

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Related News

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Michel Simard
Michel Simard

The misery will continue for oil stocks   ... (Read More)

Aug 14, 2019 12:38 GMT· Reply
Discussion
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (UK) English (India) English (Australia) English (South Africa) English (Philippines) English (Nigeria) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 中文 香港 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
NoYes
CancelYes
Saving Changes

+