US President Donald Trump said there could be a “very fruitful summit” in the G20 next month. Chinese counterpart Xi Jinping, meanwhile Saudi Arabia announced attacks on its oil industry for a second consecutive day Tuesday but instead of growing trade war worries to lower the market.
After the shock of that month, Trump’s security words and a triple return to Wall Street’s Dow were enough to put bulls on top of Tuesday’s oil action.
West Texas intermediate income, crude landmark in the US, grew by 89 cents or 1.5% to $ 61.93 a barrel of 11:35 ET after a top session of $ 62.09. It fell 1% at the previous session, after collecting as much as 2.7%.
Brent also had a sliding trip on Monday, rising 2.8% to a point before falling 0.7%. Brent Futures in London, global benchmark for oil, grew by $ 1.13, or 1.6%, to $ 71.36.
The Riyadh government announced on Tuesday several unidentified drones attacking two pumping stations belonging to Saudi Aramco, the state oil company in Saudi Arabia, forcing it to suspend some operations to assess damages.
The UAE added Monday’s tensions by saying that four of their tankers in the Gulf had been targeted at the weekend. The attacks were reported at the end of Monday’s announcement that two Saudi oil tankers were hit and injured as they went to the Straits of Hormuz, the world’s most critical oil shipment.
Neither Saudi Arabia nor UAE, however, have said exactly what happened to the ships. With no party claiming responsibility then – and no details of case specifics that could not identify potential culprits – the market soon took a leap in history, focusing on the highest Chinese tariffs for US goods that eventually drove prices of the lowest oil after their early rally.
At Tuesday’s session, however, the Saudi broadcast of aircraft attacks at its pumping stations Aramco got more attention. Media Pro-Houthi claimed responsibility for the attacks, saying seven drones were used to target a Saudi oil pipeline. A spokesman for Houthi, Mohammad Abdul Salam, on Twitter said the attack was in retaliation for Saudi-led “aggression, genocide and siege” during the four-year war in Yemen.
Trump remarks that he believed that China was still willing to enter into a trade agreement with the US, adding to the risk appetite of investors in the markets.
That aside, OPEC‘s monthly report that its 14 Saudi-led members had cut production back in April, though little, gave further impetus to bulls.
OPEC said it poured 30.03 million barrels a day in April, or nearly 550,000 pounds less than in March.
It also predicts global oil supply will grow by 2.22 million bpd in 2019, against a 1.21m increase in demand. The 1mbpd difference could give the group the legitimacy to widen production cuts in its June meeting with Russia and other world oil producers.
Since December last year, the OPEC + global oil producer alliance has poured about 1.2 million bpd in supply to help oil price recovery by about 40% this year after the market lost more in the quarter fourth of 2018 on surplus supplies./Investing.com