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Oil rises again but global economic concerns cap gains

Reuters  |  NEW YORK 

By Laila Kearney

NEW YORK (Reuters) - Crude prices edged higher on Thursday, supported by comments from the that lifted equity markets, but a more than rally slowed as optimism surrounding U.S.-trade talks faded.

futures rose 24 cents, or 0.4 percent, to settle at $61.68 a barrel. The global posted its first consecutive nine-day winning streak since September 2007.

Intermediate crude ended 23 cents, or 0.4 percent, higher at $52.59 a barrel, also its ninth straight day of gains, that beats a 2010 record.

Earlier in the session, both benchmarks hit their highest in nearly a month. WTI hit a session high of $52.78 per barrel and Brent rose to $61.91 a barrel.

Global financial markets have climbed recently on hopes that and would avert an all-out trade war. The two superpowers concluded three days of talks on Wednesday.

But the rise in global markets began to dwindle after the world's two largest economies issued vaguely positive statements that lacked concrete details.

Comments by Federal Reserve on Thursday helped boost riskier asset classes, including oil, late in the session.

Powell said had the ability to be patient on policy, but that the Fed would shed significantly more assets than it already has.

"It was a mixed message from him, but I think it was sufficiently accommodative," said John Kilduff, a at Management. "It's a continuation of that shift towards easier policies and more assistance to the underlying economy which helped boost prices."

U.S. equity markets broadly rose after the comments. Recently crude futures have tracked closely with Wall Street.

However, investors remained worried about a potential slowdown in the global economy, with disappointing data from overnight adding to concerns.

China's prices in December rose at their slowest pace in more than two years, a worrying sign of deflationary risks.

Market participants also were paying close attention to global crude supply, particularly a shale boom in the U.S. production has held around a record high of 11.7 million barrels per day since early November, according to government data.

To counter rising U.S. output, the Organization of the Exporting Countries and its allies, including Russia, reached a deal to rein in supply that officially began in January.

forecast that Brent will remain range bound at $55 to $65 per barrel as inventories build in the coming months, while it expects "the market will return to a balanced state" by the second half of 2019.

Iranian said on Thursday U.S. sanctions against his country were "fully illegal" and would not comply with them.

The deal had hung in the balance on concerns that Iran, whose crude exports have been depleted by U.S. sanctions, would receive no exemption and block the agreement.

U.S. oil production, drilling & storage levels: https://tmsnrt.rs/2GVNTmb

(Additional reporting by Stephanie Kelly and Scott DiSavino in New York, Noah Browning in London and Henning Gloystein in Singapore; Editing by and David Gregorio)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, January 11 2019. 02:49 IST
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