Meanwhile, Washington relaxes restrictions on business dealings with Venezuela: File Image/Pixabay
Oil on Friday retreated to a three-week low based on numerous conflicting signals, including concern over the U.S. and China economies, optimism over U.S. president Donald Trump’s tariff deals, and growing inventories.
Brent settled down 74 cents at $68.44 per barrel, while West Texas Intermediate settled down 87 cents to $65.16.
For the week, Brent was down about 1 percent, and WTI was down about 3 percent.
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We expect crude to slowly sell off this fall
Macquarie Group analysts
On the bearish side of the ledger: new orders for U.S.-manufactured capital goods unexpectedly fell in June, giving analysts cause to ponder a possible slowdown in business spending during the second quarter.
Also, China’s fiscal revenue dipped 0.3 percent in the first six months from the same time last year a year earlier.
This augmented concern over earlier reports of stock builds in the U.S., with inventory levels at Cushing, Oklahoma, rising to the highest since June, and distillate reserves increasing for a second straight week (although by contrast, crude inventories fell and diesel stockpiles hovered at the lowest seasonal level since 1996).
On the bullish side of the ledger: Trump said he had a good productive meeting with Federal Reserve chair Jerome Powell and thought he might be ready to lower interest rates, which would lower consumer borrowing costs and stimulate economic growth.
Trump also buoyed sentiment by announcing that most of the major tariff/trade deals he had been seeking were now ratified.
Also, Iran said it would continue nuclear talks with European powers, and Washington said it would allow partners of Venezuela’s state-run PDVSA, including Chevron, to operate within restrictions in that sanctioned country.
What impact all of these elements would have on trading moving forward was unclear, but Macquarie Group analysts including Vikas Dwivedi wrote in a note, “We expect crude to slowly sell off this fall, driven by steady acceleration of stock builds, softening physical markets, reduced refinery margin support and continued deescalation of geopolitically driven supply risk.”