Oil prices gained on Monday following the data last week that showed US crude inventories slumped to their lowest in as long as three years. The escalating trade friction between the US and China, two of the world’s biggest economies, remained the central focus among participants.
Crude Oil WTI futures for delivery in August traded at $74.8 per barrel, or 0.38 percent higher from their previous close. London-based Brent Oil Futures for delivery in September were also higher, up 0.47 percent, traded at $77.48 per barrel.
The inventories at Cushing, which is the delivery point of US crude futures, plummeted to their lowest in three and a half years, according to the data that was shown on Thursday.
“Cushing is clearly screaming out for crude, with the prompt few months more than $2 backwardated,” stated Virendra Chauhan, who is an analyst at Singapore-based Energy Aspects.
The Organization of Petroleum Exporting Countries (OPEC) and other participant countries struck a deal earlier this month, giving the green light for a modest boost in production output.
Amid all this, traders were still careful over the trade spat between the United States and China. This is true even when analysts suggested that the concerns than oil prices would be weighed down by the trade war have slowly faded.
On Friday, the US tariffs on $34 billion worth of Chinese goods were implemented. US President Donald Trump said that another $16 billion worth of import duties are set to take effect after a couple of weeks. He also said that he is thinking of slapping additional duties on $500 billion in Chinese goods if Beijing retaliates.
China responded promptly and slapped duties on the same amount of value unto US products. China’s Ministry of Commerce stated that it had no choice but to respond to the US, which they claim had “launched the largest war in economic history.”
In other news, Iran’s oil minister accused Trump over the weekend of insulting OPEC by ordering it to boost production and lower down prices. He added that the country’s oil production and exports had not changed just because of US pressure.
“Mr. Trump sends every day a new message that creates uncertainty in the market,” said Iranian Oil Minister Bijan Zanganeh stated in an interview. “Trump’s order to OPEC members to increase production is a great insult to those governments and nations, and destabilizes the market.”