Oil inches higher, but on track for big weekly decline

Tokyo — Oil prices edged up on Friday after a difficult week, but were still headed for losses of about 4%, hit by a combination of rising global supply and uncertain future demand.

US crude rose for the first time in four days, gaining 18c, or 0.3%, to $54.36 a barrel by 3.39am GMT. The contract was set for a weekly loss of more than 4%.

Brent crude was up 5c, or 0.1%, at $59.67 a barrel, leaving it on track for a drop of nearly 4%.

Worries over global economic growth, along with oil demand, continue to haunt the market as leaders from the US and China struggle to end a 16-month dispute that has roiled trade between the world’s top two economies.

“Concerns about the US-China trade dispute have come home to roost,” said Stephen Innes, Asia Pacific market strategist at AxiTrader.

The market received some respite from a run of poor economic data after an unexpected bounce in a private sector survey of Chinese manufacturing activity on Friday, which contrasted with the dour results of an official survey on Thursday.

Japanese factory activity, however, sank to more than a three-year low in October, data showed on Friday, in a fresh warning sign for the world’s third-largest economy.

US crude inventories rose by 5.7-million barrels in the week to October 25, dwarfing analyst expectations for an increase of just 494,000 barrels.

A Reuters survey showed that oil prices are likely to remain under pressure this year and next. The poll of 51 economists and analysts forecast Brent crude would average $64.16 a barrel in 2019 and $62.38 in 2020.

Meanwhile, US crude production soared nearly 600,000 barrels a day in August to a record of 12.4-million, buoyed by a 30% increase in Gulf of Mexico output, according to government data released on Thursday.

Those numbers came as a Reuters survey found output from the Organization of the Petroleum Exporting Countries recovered in October from an eight-year low, with a rapid recovery in Saudi Arabian production from attacks on oil plants more than offsetting losses in Ecuador and voluntary curbs under a supply pact.

Reuters