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Oil rises 2% as recession fears recede


Oil prices rose more than 2%, recovering from two-day lows, after data showed increased US retail sales, which helped allay fears of a recession in the world's largest economy. Brent crude rose 2% to $ 59.48 , Having dropped 2

Oil prices rose more than 2%, recovering from two-day declines, after data showed increased US retail sales, helping to allay fears of a recession in the world's largest economy.

Brent crude rose 2% to $ 59.48 a barrel, after falling 2.1% yesterday and 3% the previous day.

US crude also rose 2% to $ 55.6 a barrel, after falling 1.4% in the previous session, and 3.3% last Wednesday.

US retail sales rose 0.7 percent in July as consumers bought a batch of goods, but cut their car purchases, data showed yesterday.

This came after global markets witnessed a sell-off, following the reversal of US Treasury yields for the first time since June 2007, a development usually seen as a credible indicator of an impending recession.

Equity markets also rose yesterday, with growing expectations of more stimulus from central banks, overshadowing concerns about slowing global growth.

But gains are unlikely to increase after last week's data, including a surprise drop in industrial production growth in China to a 17-year low and a drop in exports that pushed Germany's economy into a second-quarter contraction.

Brent is still up about 10 percent this year, thanks to production cuts led by the Organization of the Petroleum Exporting Countries and allies such as Russia, the group known as OPEC +.

OPEC + agreed in July to extend oil production cuts until March 2020 to support prices.

But OPEC's efforts are being undermined by concerns about the global economic slowdown, amid a trade dispute between the United States and China, as well as rising US crude inventories and rising US shale oil production.

For its part, reported «Interfax News Agency, citing a source yesterday, that oil production in Russia increased to an average of 11.32 million barrels per day, in the first half of August.

Russia has pledged to cut production by 228,000 bpd from the 11.41 million bpd pumped in October 2018.

Two well-informed sources said yesterday that the joint venture between Saudi Aramco and Malaysia's Petronas has resumed work on its crude distillation unit at its refinery in Malaysia. They said the unit was supplied with crude oil last week.

The refinery was closed in April, after a fire damaged the desulfurization unit.

In a related context, the Iraqi Oil Ministry said yesterday that the resumption of pumping oil supplies to the power station «Hartha» in southern Iraq, the day before yesterday, after repairing a pipeline damaged by an explosion.

The ministry said in a statement that the pumping stopped on Wednesday, after an explosion in a pipeline to transport dry gas.

Oil ministry officials said the explosion was caused by high temperatures during the summer.

Most of the oil exports in Iraq, the second largest producer in the Organization of Petroleum Exporting Countries (OPEC), come from Basra in southern Iraq.

Nigeria's state-owned oil company said it aims to raise its oil production to 3 million barrels per day by 2023.

Meli Kiyari, managing director of the National Petroleum Corporation of Nigeria, told CNOOC Chairman that there is a need for strategic partnerships and new upstream investments to reach this production target.

Source: emara

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