Brent oil holds above $60 as lower inventories boost WTI

American crude stocks dropped last week by 10 million barrels amid concerns over global economic slowdown due to the US-China trade war. (AFP)
Updated 29 August 2019

Brent oil holds above $60 as lower inventories boost WTI

  • Concerns over a global slowdown in economic growth and its impact on oil demand are keeping prices in check

LONDON: Brent oil held above $60 a barrel on Thursday, withstanding pressure from concerns about economic growth, while a sharp fall in US inventories boosted West Texas Intermediate (WTI) crude futures.

International benchmark Brent crude was down 19 cents at $60.30 a barrel in early afternoon trade in London while WTI was up 32 cents at $56.10 a barrel.

“If the American Petroleum Institute (API) unexpectedly supplied bullets to oil bulls on Tuesday evening so that they could fire from all cylinders, the US government’s Energy Information Administration (EIA) flung the door of the ammunition depot wide open yesterday,” Tamas Varga of oil brokerage PVM said.

The EIA said on Wednesday that American crude stocks dropped last week by 10 million barrels, while gasoline and distillate stocks each fell by 2.1 million barrels.

On Tuesday, industry body API said US crude stocks had fallen by 11.1 million barrels last week.

US weekly crude production rose 200,000 barrels per day to a new record at 12.5 million bpd in the week to Aug. 23, the EIA said.

Concerns about a slowdown in economic growth due to the trade war raging between the US and China, the world’s biggest oil consumers, along with the potential hit to oil demand, are keeping prices in check.

“Trade tensions (are) hanging like a dark cloud threatening to rain over oil prices,” said Jeffrey Halley, senior market analyst at OANDA.

China’s commerce ministry said on Thursday that China and the US were discussing the next round of face-to-face trade talks scheduled for September, but hopes for progress hinged on whether Washington could create favorable conditions.

San Francisco Federal Reserve President Mary Daly said she is in a “watch and see” mode as she assesses the need for another US interest-rate cut for an economy that has “strong” momentum but faces headwinds from uncertainty and a global slowdown.

Concerns about the global economy have watered down the impact of oil production cuts that the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers have been exercising over the past two years.

“When they (OPEC and its allies) really managed to accelerate the price from late 2016 onwards they had a big tailwind of global growth acceleration, now they have this big negative headwind of global growth de-acceleration,” said Bjarne Schieldrop, chief commodities analyst at Nordic bank SEB.

Morgan Stanley has lowered its oil price forecasts for the rest of the year, citing a weaker economic outlook, faltering demand and higher shale oil output.

At Davos, innovative products point to a sustainable future

Updated 24 January 2020

At Davos, innovative products point to a sustainable future

  • A single tree that to bear 40 different types of apple

DAVOS: The World Economic Forum is not all about the fourth industrial revolution or the rise of AI.

You can also find all manner of strange and intriguing products on display from biodegradable plastic made from algae to wallpaper made from recycled corn husks.

One stand titled “How do you design a tree?” is part of a conservation effort where a single tree is designed to bear 40 different types of apple.

Another stand displays colored seaweed on a rack, showing how clothes can be dyed in a sustainable, non-chemically corrosive manner.

Propped along a large wall is Fernando Laposse’s wallpaper made of variations of purple corn husks that are reinforced with recycled cardboard and cork to create wallpaper and furniture. The husks come from corn that needs very little water and can be grown in the desert, which makes it all the more sustainable.

“This initiative helps the local economy as it brings in jobs and a resurgence of crafts and food traditions while also ensuring sustainability,” Laposse said.

Another display shows a machine that extracts pellets from a mixture of algae and starch and is used to create a thread that is the base of 3D printing. These sustainable, biodegradable plastics made from algae are being experimented with in different regions.

With the rise of deep fakes — a branch of synthetic media in which a person in an existing image or video is replaced with someone else’s likeness — another stand delivers a warning on the looming dangers of unregulated software.

The Davos forum prides itself on its sustainability, and key topics have included climate, mobility, energy and the circular economy. Everything is recyclable, and participants must download an application in order to keep up with the program and any changes — a move to cut down on paper waste.