Oil rose the most in six weeks on Friday on upbeat US jobs data and Chinese manufacturing figures, but persistent trade dispute concerns kept prices down on the week.
Futures in New York rose 3.7 percent on Friday, the biggest jump since the attacks on Saudi oil infrastructure in September. US hiring proved unexpectedly resilient last month and new Chinese manufacturing orders rose at the quickest pace in more than six years.
Still, prices for the week were dragged down by concerns of a slowing global economy, abundant US crude stockpiles and trade talks.
“The main thing here is the good economic news — Chinese data suggested it was time to buy back in,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “But we’re still in a situation where there’s too much oil out there and the economic news generally looks like we are going for a downturn in the next six months and that’s got people concerned.”
Prices fell this week as Chinese officials cast doubt on the potential to reach a comprehensive long-term trade deal with the US even as the two sides get close to signing an initial accord.
The protracted dispute, together with ample oil supplies, is putting pressure on OPEC and its allies to reduce output further to prop up prices.
“Looking ahead, any price recovery faces an uphill struggle given the backdrop of rising supply and cooling demand,” PVM Oil Associates analyst Stephen Brennock wrote in a report.
West Texas Intermediate (WTI) for December delivery rose US$2.02 to settle at US$56.20 a barrel on the New York Mercantile Exchange, down 0.8 percent for the week.
Brent for January delivery advanced US$2.07 to close at US$61.69 a barrel on the London-based ICE Futures Europe Exchange, little changed from last week’s US$61.73 a barrel. The global benchmark crude traded at a premium of US$5.42 to WTI for the same month.
China reached a consensus in principle with the US on the first phase of a potential trade deal, according to the Chinese Ministry of Commerce.
However, Chinese officials remain skeptical, saying that would require the US to withdraw tariffs on about US$360 billion of imports from China — something many do not see US President Donald Trump being ready to do.
“The trade issue has been overhanging on the market for quite some time,” said Gene McGillian, senior analyst and broker at Tradition Energy Group in Stamford, Connecticut. “Right now the market is eyeing signs of whether trade negotiations are going to bear fruit.”
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