Oil prices rebounded on Thursday, as Brent crude gained more than $1 after its biggest one-day drop in a couple of years in the previous session.
Crude Oil WTI Futures for delivery in August were trading at $70.86 per barrel, up 0.7 percent. Brent Oil Futures for delivery in September, which are traded in London, gained 1.7 percent at $74.62 per barrel.
Oil prices were put under pressure on Wednesday on the news that the country Libya would continue oil exports. Meanwhile, the heating up US-China trade tensions also sparked concerns over demand.
Libya’s National Oil Corp announced that four export terminals were being reopened. These allowed the return of as much as 850,000 barrels a day of oil into the markets, finishing a standoff that had shut down of Libya’s oil output.
Elsewhere, US crude oil exports to India reached a record in June and so far this year nears double last year’s total.
“If China levies a tariff on US oil then US imports to India will probably rise,” stated A. K. Sharma, who is the head of finance at Indian Oil Corp. “We are looking for a mini-term deal to buy three to four cargoes of US oil over a period of three to six months instead of buying single cargoes.”
China’s commerce ministry stated in a statement released around midday on Wednesday that it was “shocked” by the most recent US trade action. It also urged international community to work together against the trading bullying. It has also called the actions “completely unacceptable.”
The Organization of Oil Exporting Countries (OPEC) predicted earlier that worldwide oil demand will cross 100 million barrels per day for the first time in 2019. However, it also warned that the trade tension could negatively affect the market.
OPEC decided to raise oil output in June following an important meeting in Vienna. Even though the decision was widely anticipated, the supply boost was still less than what some investors had anticipated.
Meanwhile, gold prices were little moved on Thursday as the greenback steadied against other major currencies after the inflation report topped expectations. The report also reaffirmed expectations that the Federal Reserve would increase interest rates two more times this year.
The Labor Department on Wednesday its producer price index for final demand was 0.3 percent higher last month, compared with the expected 0.2 percent.
Gold futures for delivery in August on the Comex division of the New York Mercantile Exchange declined 0.01 percent to $1,244.30 per troy ounce.
The US dollar index, which gauges the strength of the greenback against a basket six other major currencies, perked up 0.04 percent at 94.76.
“The US dollar firmed up across the board and I think that is the main reason,” a trader based in Sydney said. “With the softer US equity markets and the ongoing trade war between the US and China you would think it would provide some support for gold but that has not been the case,” he added.