OIL PRICE CRISIS: Oil prices RISE despite US-China trade war fears

MABUX says high volatility remains in global bunker market

Brent was on track to fall 3.2 percent in the week.

Oil prices started the week with huge losses.

Oil futures for September were up $0.02 at $68.26 a barrel by the end of today's session. ANZ analysts said in a note: "Investors did find some solace in comments from Saudi Arabia that it would not oversupply the market indiscriminately".

It is widely believed that Trump's administration has been pressuring the Saudis to increase their oil production thus prevent a shock to the market once Iran's oil supplies are cut off.

Oil is mostly traded in USA dollars all over the world and a stronger US dollar pressures the oil demand.

Only a weakening USA dollar was able to boost prices on Friday.

We know that there are 3 reasons behind the increasing oil price, first is OPEC over executes cut deals, second is USA sanctions against Iran and third is the rising crude oil demand will further consume global storage, because of the coming summer. There was no mention in the statement of Saudi June crude exports.

Decline in refinery utilization rates, as well as oil exports, which had dropped last week to the lowest level since April, contributed to the inventory build.

U.S.net imports that measures its imports deducted by its exports is a very important value for the oil price movements. OPEC agreed to slash the output by 1.2 million barrels per day from January 1.

EIA also reported on Wednesday that USA oil production reached 11 million barrels per day during the week ending July 13 for the first time in the history.

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The kingdom's crude output surged the most in three years last month, as Trump demanded his ally's help in cooling gasoline prices and filling in the supply gap that will be created by his sanctions on Iran.

Brent and the WTI prices headed different ways on Thursday.

However, experts have already emphasized that any increase in Saudi output would be temporary and that pumping more oil may not be sustainable over a long period of time.

In May, Riyadh's crude oil production spiked to a three-year high in response to Washington's demand that the oil-rich kingdom help keep gasoline prices in check and fill the supply gap when United States sanctions on Iran enter into effect in November.

The higher differentials between the two major benchmarks are, the more arbitrage opportunities for traders to pursue.

As per Goldman Sachs, unpredictable policy from the US government is increasing volatility in the oil and fuel markets.

Trade tensions continued to weigh on the market, providing a ceiling for any gains, traders said.

The trade battle between the U.S. and China also threatens to escalate, potentially dampening demand if the retaliatory tariffs damage their economies.

Economists point out that tariffs might increase the inflation and disrupt the economic growth of Asian countries which can create a bearish outlook for the oil sector.

After a hard 2017 in which Saudi Arabia's economy contracted by 0.7 per cent year-on-year, the economy began to recover in the first quarter of 2018, growing by 1.2 per cent year-on-year compared with a 1.2 per cent fall in the fourth quarter of 2017.

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