Oil advanced as the world’s biggest oil exporter opened its books to investors amid a deepening U.S.-China trade war that has imperiled global energy demand.
Futures settled 0.8% higher in New York on Monday. Saudi Arabia’s state-owned oil explorer curbed capital spending by 12% in the past year, a potential harbinger of tightening supplies. Meanwhile, U.S. President Donald Trump said trade talks with China set for next month may fall through, and American orders for gasoline from European refiners waned.
Despite the increase, crude remains down this month on fears the U.S.-China trade spat may expand into a currency war. The International Energy Agency on Friday trimmed its forecasts for oil-demand growth this year and next, and warned that it may lower the estimates further as the trade conflict drags on.
West Texas Intermediate crude for September delivery gained 43 cents to settle at $54.93 a barrel on the New York Mercantile Exchange.
Brent for October settlement added 4 cents to $58.57 on the ICE Futures Europe Exchange. The contract slumped 5.4% last week. The global benchmark crude traded at a $3.72 premium to WTI for the same month.
Trump said earlier this month that new tariffs on Chinese imports will take effect Sept. 1, shattering a truce reached with President Xi Jinping weeks earlier. The comments unleashed tit-for-tat measures on trade and currency policy that risk accelerating a wider geopolitical fight between the two countries.
Meanwhile, last week, unnamed Saudi Arabian officials said the kingdom plans to keep crude exports below 7 million barrels a day in September as it allocates less oil than customers demand. Aramco will also provide customers across all regions with 700,000 barrels a day less than they requested, the officials said.
