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Crude Rallies After Attack on Saudi Oilfield, Gains Capped by Negative Factors

August 19, 2019 at 13:02 by Vladimir Vyun

Futures for crude oil gained today, rallying more than 1% intraday. The gains eased, though, as traders were concerned about negative factors affecting crude.

Risk appetite prevailed on markets due to positive developments in the Sino-US trade war. The United States decided to postpone new tariffs on Chines goods as well as to delay sanctions on Chinese tech giant Huawei by 90 days. Meanwhile, China announced an interest rate reform, which was welcomed by markets.

A positive factor specific for crude was the attack of Saudi Arabia’s oilfield by Yemeni separatists. The initial positive impact of the news dwindled, though, after reports that the attack did not cause supply disruptions.

Turning to negative factors, a report from the Organization of Petroleum Exporting Countries was bearish for crude. It showed that demand will grow this year less than was expected and supply growth will outpace consumption growth by a wide margin.

Baker Hughes reported on Friday that the oil rig count increased by 6 to 770 last week. The number of gas rigs decreased by 4 to 165.

Futures for delivery of WTI crude oil in September gained by 0.53% to $55.16 per barrel as of 12:22 GMT on NYMEX today. Brent crude for delivery in October advanced 0.55% to $58.96 per barrel in ICE. Meanwhile, September contract for natural gas dropped by 2.35% to $2.15 per million British thermal units.

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