Oil prices edge higher over warnings of western air strikes against Syria

Daniel Fowler
April 13, 2018

A US government report on expanding domestic oil inventories barely fazed traders caught up in the rush of world events. -China tensions appeared to ease, but concerns over USA production growth lingered in the wake of a hefty weekly rise in domestic rig activity. "If fundamentals were the driving force, we would not have seen the continuation of this week's rally".

West Texas Intermediate crude futures gained 3.3 per cent to 65.49 dollars a barrel.

Gasoline futures fell 0.6% to $2.0546 a gallon, and diesel futures fell 0.4% to $2.0838 a gallon.

Oil prices declined Friday, and suffered their worst weekly declines in two months.

The prices last Friday suffered their worst weekly decline in two months after they followed plummeting equity markets amid growing fears of a trade war between the USA and China, the world's two largest economies.

China lashed out at the United States on Thursday saying that the trade disputes, in which both sides have threatened to impose tariffs on imports of several products, were “single-handedly provoked by the U.S.” and that Beijing was prepared to escalate the spat if Washington did not back off from its threatened import tariffs.

"We still think that the cartel is underestimating non-OPEC supply growth", said Capital Economics analysts, noting that higher prices will encourage USA producers to ramp up activity and OPEC members to exceed quotas.

OPEC Cuts Output While US Shale Steams Ahead

USA crude inventories rose by 1.8 million barrels in the week to April 6 to 429.1 million, according to a report by the American Petroleum Institute (API) on Tuesday, compared with analysts' expectations for a decrease of 189,000 barrels. The agreement, which is set to expire at the end of 2018, helped crude prices climb more than 50% in the second half of a year ago. Looking at technical conditions, both Brent and WTI closed above their previous January and March highs.

U.S. WTI crude futures CLc1 were at $67.20 a barrel, up 38 cents, or 0.4 percent from their last settlement.

OPEC's main objective for the cuts is to eliminate a global surplus in oil stocks and rebalance the market.

The records came despite government data showing USA crude stockpiles rose unexpectedly and American crude production continued to hit new highs.

A more direct intervention in Syria would cause geopolitical fractures along multiple lines, given the potential for a response from US adversaries ranging from Russian Federation to Hezbollah.

Signals from U.S. officials that the USA may impose sanctions on Iran on Wednesday have also been bullish for crude.

Siria: alta tensione Usa-Russia. Trump 'arriveranno missili'
Su Facebook, la portavoce della diplomazia russa, Maria Zakharova , ha scritto: "I missili "intelligenti" dovrebbero volare verso i terroristi, non verso il governo legittimo" .

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