Crude climbs 2% on European inventory decline despite IEA slowdown forecast

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Crude climbs 2% on European inventory decline despite IEA slowdown forecast

On Friday, the 9th of August 2019, both UK and US crude soared more than 2 percent, while an unprecedented drop in European crude inventories alongside an OPEC+ output cut undermined an IEA (International Energy Agency) report displaying global demand of crude oil was dropped to its lowest levels since the era of great financial depression of 2008-2009.

Aside from that, a sharp plunge in operational US drilling rig counts added further bullish wings on crude oil price futures, despite a gloomier demand dampening investors’ optimism amid a tit-for-tat tariff battle between the world’s first- and second-largest economy.

On Friday’s (August 9th) market round off, Brent crude surged more than 2 percent to settle down at $58.53 per barrel, while US West Texas Intermediate crude posted an upscaled rise of 3.7 percent to settle down at $54.50 a barrel, however both of the benchmark crude oil futures’ prices reported a weekly decline amid rumbling doldrums of a protracted Sino-US trade war and a sharp plunge in manufacturing orders all over the globe spurring frets of a near-term recession.

Apart from that, UK crude shrugged off more than five per cent this week, while US crude reported a 2 percent weekly decline. Referring to an IEA forecast of downbeat crude oil demand which in effect may jolt crude oil futures’ prices in to the 40s, a UBS analyst, Giovanni Staunovo said on Friday’s (August 9th) market wind down, “Despite a further cut in oil demand growth by the IEA, oil prices are trading marginally higher, as the demand growth cut was already announced previously by the head of the IEA and the agency still expects larger inventory draws for 2H19”.