MARKET WATCH: Brent crude settles under $60/bbl for second consecutive day
Light, sweet crude oil for September dropped more than $1 for a second consecutive day on the New York market while the Brent October contract dropped by nearly 90¢ to settle under $59/bbl in London.
Light, sweet crude oil for September dropped more than $1 for a second consecutive day on the New York market while the Brent October contract dropped by nearly 90¢ to settle under $59/bbl in London, which analysts attributed to escalating US-China trade relations.
Brent has settled under $60/bbl for 2 consecutive days on oil investors’ concerns about slowing world oil demand given an escalating US-China trade dispute.
China on Aug. 5 allowed its currency to depreciate to 7 yuan to the US dollar. In response, US Treasury officials called China a currency manipulator. China officials later appeared to soften their tone, with the Chinese Central Bank setting a stronger target for the yuan than expected.
Meanwhile, US President Donald Trump has pressured the US Federal Reserve to cut interest rates.
Both China and US officials say they do not want a trade war, but Trump recently announced a new round of tariffs on Chinese goods.
On July 31, the Federal Open Market Committee lowed the current federal funds rate to 2.25%, citing “implications of global developments for the economic outlook as well as muted inflation pressures.” The Fed rate cut was its first since December 2008.
The Fed also acknowledged the possibility of future cuts, saying it will “act as appropriate to sustain the expansion.” Trump on Aug. 7 in a tweet urged the Fed to cut interest rates “bigger and faster.”
Light, sweet crude oil on the New York Mercantile Exchange for September delivery fell 97¢ to settle at $54.69/bbl on Aug. 5 while the October contract fell $1.09 to $54.58/bbl.
The NYMEX natural gas price for September decreased 5¢ to $2.07/MMbtu.
Ultralow-sulfur diesel for September fell 5¢ to $1.85/gal. The NYMEX reformulated gasoline blendstock for September dropped 6¢ to a rounded $1.72/gal.
Brent crude for October fell $2.08 to $59.81/bbl. The November contract fell $1.97 to settle at $59.35/bbl.
Gas oil for August declined $13.25 to $564.75/tonne on Aug. 5.
The average for the Organization of Petroleum Exporting Countries’ basket of crudes was $60.54/bbl on Aug. 5, down $1.13.
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