Oil inches up on strong economic data; Sino-US rift caps gains

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Oil inches up on strong economic data; Sino-US rift caps gains

On Friday, both US and UK crude futures’ prices scheduled to be expired on August had wrapped up the day marginally higher, mostly buoyed up by a raft of supportive economic data, however, a growing holocaust over Sino-US relationships had kept a lid on gains.

In point of fact, Friday’s market sentiment was sweetened followed by the reveal of IHS Markit flash composite eurozone PMI (Purchasing Managers’ Index) data showing that the bloc’s business activities had grown for the first time in July since mid-February, while an increase in US business activities to a six-month high in July despite a steady rise in pandemic cases had added to investors’ optimism.

Apart from that, investors had also been eyeing the courses of Tropical Storm Hanna, which is expected to cross the Baffin Bay, 74 kilometres south of Corpus Christi, Texas, on Saturday evening, however, as of Saturday morning, energy companies had not evacuated any workers or shutdown productions.

Slow economic recovery, pandemic resurgence could dent fuel demands

Although a bundle of upbeat economic data had prodded the crude oil futures’ prices to end up the day marginally higher, a steady spike in pandemic cases in the United States alongside over 30 million laid-off Americans had darkened oil demand outlook, eventually leading to a profit-taking weekend sell-off amid growing pandemic uncertainty.

Citing statistics, on Friday’s commodity market closure, the UK crude futures’ prices had wrapped up the day slightly higher to $43.34 per barrel, while the US WTI (West Texas Intermediate) crude added 0.3 per cent to $41.29 a barrel.

For the week, the US crude gained 1.7 per cent, while the Brent crude futures rose by 0.5 per cent. Aside from that, a Barclays Commodities Research was quoted saying in a client note earlier on Friday that the oil prices could witness a downturn in a near-term outlook if fuel demand recovery slowed further, in particular in the United States, however, contradicting its earlier comments, the London-based lender had lowered its oil market surplus forecast for current year to an average of 2.5 million barrels per day from an earlier 3.5 million barrels per day, suggesting a turn over in crude oil demands.