Oil dips further from 2019 highs on demand worries
* Wall St tumbles as weak factory data fuels slowdown
* Brent inches down for the week, WTI flat on the week
* Trump says China trade deal 'will probably happen' -TV
* U.S. oil drillers cut rigs for fifth week in a row -Baker
(Updates to settlement)
By Devika Krishna Kumar
NEW YORK, March 22 (Reuters) - Oil fell about 2 percent on
Friday, slipping further from 2019 highs as focus shifted to a
lack of progress in U.S.-China trade talks and as grim
manufacturing data from Germany and the U.S. reignited fears of
a slowdown in the global economy and oil demand.
Wall Street's main indexes tumbled between 1 and 2 percent
on Friday after manufacturers in Europe, Japan and the United
States suffered in March as surveys showed trade tensions had
impacted factory output, a setback for hopes the global economy
might be turning the corner on its slowdown.
Brent crude futures settled at $67.30 per barrel, 83
cents, or 1.2 percent below their last close and down about 0.2
percent on the week. The contract hit a four-month high of
$68.69 on Thursday.
The global benchmark has risen by more than 20 percent since
the beginning of January, due to supply cuts by the Organization
of the Petroleum Exporting Countries and allies, such as Russia,
and U.S. sanctions on Iran and Venezuela.
U.S. West Texas Intermediate (WTI) futures fell 94
cents, or 1.6 percent, to settle at $59.04 per barrel. WTI
marked a 2019 peak on Thursday at $60.39 and rose 0.8 percent on
"Today's disappointing PMI data out of Germany and France
spurred further dollar gains while, at the same time,
compressing global risk appetite," said Jim Ritterbusch,
president of Ritterbusch and Associates.
The U.S. dollar climbed against the euro on Friday to
its highest in more than a week. A strong dollar makes oil more
expensive for holders of other currencies.
"The fact that these macro factors are able to offset the
price impact of an exceptional bullish EIA report attests to the
fragility of this three month bull move in oil."
The U.S. Energy Information Administration data on Wednesday
showed that stockpiles last week fell by nearly 10 million
barrels, the most since July, thanks to strong export and
As economic growth has slowed across Asia, Europe and North
America, potentially denting fuel consumption, no breakthrough
has emerged in the trade stand-off between Washington and
Beijing, at least before meetings scheduled on March 28-29.
Trade negotiations with China were progressing and a final
agreement "will probably happen," U.S. President Donald Trump
said in a television interview aired on Friday.
Three in four Japanese companies expect U.S.-China trade
frictions to last until at least late this year, a Reuters poll
A jump of more than 2 million barrels per day in U.S. crude
oil production <C-OUT-T-EIA> since early 2018 to a record 12.1
million bpd has made the United States the world's biggest
producer, ahead of Russia and Saudi Arabia.
This has resulted in increasing exports, which have doubled
over the past year to more than 3 million bpd. The International
Energy Agency estimated that the United States would become a
net crude oil exporter by 2021.
U.S. energy firms this week reduced the number of oil rigs
operating for a fifth week in a row, cutting nine rigs to the
lowest count in nearly a year as independent producers follow
through on plans to cut spending with the government cutting its
growth forecasts for shale output.
(Additional reporting by Shadia Nasrallah in London, Henning
Gloystein in Singapore; Editing by Marguerita Choy and Chizu
First Published: 2019-03-22 03:23:43
Updated 2019-03-22 21:18:38
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